23 Sep 2021
The Ministry of Finance announced that they have launched a new pilot program for B2C e-invoicing. Initially, 100 companies will participate in a trial phase for 6 months. The process involves recording all transactions with consumers on an electronic system that is linked to the Tax Authority in real-time. The transactions will be recorded in a central database. The logging will be performed through a system installed on the merchant’s POS (point of sale) devices.
Upon full launch of the system after the pilot phase, the first industry to join will be retailers such as supermarkets and pharmacies, although e-commerce companies will be added later. The services industry will join after that. There is no set timeline for completing the integration of all businesses, and the Ministry expects the process to take years.
The goal of the system is to reduce tax evasion significantly while integrating the large informal economy into the formal economy. The Ministry expects the system to ultimately double the government’s tax revenues. Companies who do not join the system will suffer suspension of their dealings with all state entities and a halt to export subsidies.
The B2B e-invoicing system has already been implemented, and full integration of all businesses is expected by April 2023. Currently, all of the 2,800 large taxpayers are issuing e-invoices and will be followed later this year by joint-stock and investment companies, public sector companies, and government agencies. So far, this system has detected more than 2,800 tax evasion cases, for which an additional EGP3.5bn in taxes due were collected.
(Source: Reuters (English), Mubasher, al-Borsa News, Hapi Journal, al-Ahram, al-Youm al-Saabe, al-Shurouk, Euronews, al-Arabiya)