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A little nudge to encourage e-commerce players to join the tax system: The Finance Ministry is planning to introduce new incentives to encourage local and foreign e-commerce platforms operating in the country to join the tax system, government sources told EnterpriseAM. The move comes as part of a major push by the ministry to tighten its grip over the e-commerce sector.
As things stand: VAT revenue collected from e-commerce activities came in at EGP 21 bn last fiscal year, marking a 101% increase from the previous FY.
REMEMBER- The Finance Ministry introduced regulatory amendments to the VAT Law in 2023, subjecting non-resident service providers to a value added tax of 14%. The amendments apply VAT on transactions made on “electronic distribution platforms” which includes websites, internet portals, e-stores or other internet marketplaces connecting suppliers with clients.
The move proved fruitful: Taxing these platforms generated some EGP 13.7 bn in e-commerce tax revenue over the past two fiscal years — a significant increase from the EGP 85 mn recorded the year prior to their taxation, according to one of the sources.
So did the move to tax content creators: There is a growing trend among content creators to join the tax system, one of the sources said. These content creators can join the simplified tax system, which is part of the first package of tax relief measures. The Finance Ministry plans to expand these incentives to further encourage creators to join the formal economy, the source said.
The blogger tax is fairly new, first introduced in 2021 — all YouTubers and content creators must pay income tax, while those who earn over EGP 500k a year via local platforms must also charge VAT. In the fiscal year 2023-2024, the state collected EGP 2.1 bn in taxes from content creators.
ICYMI- The Finance Ministry kick-started earlier this month community dialogue sessions on the second package of tax facilities set to launch in 4Q 2025. Meetings were held with major accounting and tax consultancy firms to identify problems and challenges facing large local and foreign companies in preparation to address them in the new package.
The Madbouly government plans to raise its tax revenue to reach 15% of GDP by the fiscal year 2028-2029, according to a government document seen by EnterpriseAM.
