Revolutionary change in the Egyptian Tax Collections through Egypt's New E-Invoice System!
As part of its efforts to keep pace with the technological developments and to accelerate digital transformation in Egypt, the Egyptian Tax Authority has started the second stage of applying electronic tax invoices for the goods and services to 347 companies registered in the Tax Centre for Large Financiers based on the decision No. (518) for the year 2020.
The authority intends to make electronic tax filing mandatory for all businesses once the testing phase is complete. It is the new path for development, modernization, and moving to a different stage in tax administration that limits tax evasion more efficiently.
The fundamental idea behind businesses interacting electronically upon the electronic tax invoice is to gain more control by boosting VAT proceeds and increasing the number of registered taxpayers in Egypt. This was emphasized in statement in the preparation of the draft law on e-invoicing earlier:
“The electronic inspection of invoices is one important factor in boosting tax proceeds and increasing registered taxpayers. The inspections system helps detect taxpayers who submit non-compliant zero-rate tax declarations despite their commercial transactions. It can also detect non-VAT-registered taxpayers whose annual purchases exceeded the VAT registration threshold. Moreover, true sales figures of taxpayers’ invoices can be verified through matching them as per their declarations with purchases of others, and by matching them with customs information. The system can also identify defaulters who don’t comply with the legal date of submitting tax declarations, sales and purchases history of fake companies, and those who submit credited and debited tax files.”