Uber agrees to pay VAT in Egypt

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Source: Reuters

Uber has agreed to pay value-added tax on its services in Egypt, Egyptian officials said on Monday, a move that may help resolve a long-simmering feud with traditional taxi drivers.

The agreement would also apply to other ride-hailing companies, the head of the Egyptian Tax Authority, Abdel Azeem Hussein, said, although Uber’s main rival Careem said it was already paying value-added tax (VAT) in Egypt, where the rate is set at 14 per cent.

“Reaching an agreement and determining the tax treatment that will be applied to the company Uber and other companies operating in the same area will enhance confidence and cooperation between the authority and the tax community,” state news agency MENA quoted Hussein as saying.

Uber Egypt was not immediately available for comment.

Egypt introduced a law last May regulating ride-hailing apps Uber and Careem, after Egyptian taxi drivers filed a lawsuit arguing that the two companies were illegally using private cars as taxis and were registered as a call center and an internet company, respectively.

An Egyptian court suspended Uber and Careem’s services in March last year after the taxi drivers’ suit but another court stayed the suspension ruling in April, allowing the companies to operate while the case was appealed to a higher court. A verdict is expected on Saturday.

Careem has been paying VAT since March 2018 “in accordance with our compliance with Egyptian laws”, Hazem Ghorab, Careem Egypt’s head of corporate communications, said.

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