The Egyptian Finance Ministry has notified e-commerce platforms, including Souq, Jumia, and OLX, that they will be required to begin charging value-added tax (VAT) on all transactions in goods that would be subject to VAT if sold offline.
Some platforms have already responded and incorporated the 14% duty into their billing systems. The Ecommerce platforms will be required to settle their VAT payments to the government at the end of every month as other retailers do.
We had previously reported that the Finance Ministry had developed a framework for taxing e-commerce platforms, which it was planning to introduce alongside a batch of other amendments to the Income Tax Act.
Egypt had introduced 13% VAT in October 2016 which was increased to 14% in 2017. It had replaced the 10% GST when first introduced.
While Souq.com already applied the VAT tax, Jumia doesn’t seem to have the VAT included in their prices yet.
A page about VAT on their website notes, “As per Egyptian Tax regulations, VAT is charged at 14% on orders sold and shipped by Souq.com within the Egypt. The advertised prices for products displayed at Souq.com are inclusive of any VAT in accordance with the Egypt VAT law.”