Egypt launches 鈥榬evolutionary鈥� e-invoice system

A man wearing a protective face mask shops at Exception Market before the start of night-time curfew to contain the spread of the coronavirus disease (COVID-19 in Cairo, Egypt March 26, 2020. (REUTERS)
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  • The minister said the new system will allow the instant exchange of data for invoices in digital form

CAIRO: Egypt is set to launch a groundbreaking electronic invoice (e-invoice) system on Sunday.

Minister of Finance Mohamed Maait announced the launch of the first phase of the electronic billing system, which will be the first in the country鈥檚 history.

The minister said several companies will join the system in succession until the end of June 2021, adding that the program is an important step in digital transformation as part of Egypt Vision 2030.

It is also a major step in developing the tax system and raising the efficiency of tax examination, which contributes to reclaiming the rights of the state鈥檚 public treasury in a way that helps achieve financial and economic goals. It will also enable Egypt to complete its development path and improve citizens鈥� standard of living.

Maait said the e-invoice system will 鈥渞evolutionize鈥� integration between the tax system and the commercial community, in order to 鈥渢ransform the informal economy into the formal economy.鈥�

He added that Egypt is one of the countries leading the way in the Arab world in implementing an e-invoice system as part of a digital transformation project. The minister said the system has been closely followed and supported by the country鈥檚 political leadership.

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It is a major step in developing the tax system and raising the efficiency of tax examination.

Maait said the Ministry of Finance and the Tax Authority will provide support to companies for compulsory entry into the e-invoice system. He warned that legal measures will be taken against companies that refuse entry, including prosecution in accordance with the provisions of the new unified tax procedures law.

The minister said the new system will allow the instant exchange of data for invoices in digital form.

He said the e-invoicing will help the digital transformation of commercial transactions and will use cutting-edge technology that will formally validate the data of sources, recipients and invoice contents.

The new system is also set to bring further benefits, including increased limitations on Egypt鈥檚 black market and informal economy, Maait added.

According to the latest economic census by Egypt鈥檚 Central Agency for Public Mobilization and Statistics, the size of the informal economy included 53 percent of the country鈥檚 businesses, which employ about 4 million, or 29.3 percent of the workforce.

The volume of money invested in the sector amounted to 69.3 billion Egyptian pounds ($4.4 billion), representing about 5.1 percent of the paid-up capital of Egypt鈥檚 total economic activity.

Egyptian economists and finance experts estimate the size of the informal economy in Egypt at $395 billion 鈥� about 50 percent of the country鈥檚 economy.

The informal economy, represented by mostly small, medium and micro-sized enterprises, is not subject to quality or tax supervision.

Informal or black market businesses are spread across Egypt in the form of street vendors, markets, food carts, restaurants, factories and unlicensed real estate.