The House of Representatives approved amendments to the Value Added Tax (VAT) Law on Tuesday, June 23, 2026, as part of the government's tax reform agenda and the second phase of its tax facilitation initiative aimed at simplifying procedures, improving compliance, and supporting investment.
The amendments introduce a package of incentives to boost industrial production, support the healthcare sector, improve business liquidity, and strengthen Egypt's position as a regional logistics hub. Key measures include reducing VAT on medical equipment to 5% from 14%, extending the VAT suspension period on imported industrial machinery from two to four years, and accelerating VAT refunds from six months to four months.
Small enterprises with annual turnover below EGP 20 million will be eligible for refunds within three months. The amendments also exempt transit-related services between Egyptian ports from VAT, grant local manufacturers the right to deduct VAT on domestically produced machinery and medical devices, and exempt kidney dialysis machines, filters, and related components from the tax.
To ensure equal treatment across the financial sector, VAT exemptions were extended to financial services provided by Egypt Post, banks, companies regulated by the Central Bank of Egypt, and firms supervised by the Financial Regulatory Authority. As part of efforts to broaden the tax base, VAT will apply to the leasing of commercial and administrative properties, while natural gas will be subject to a schedule tax of EGP 20 per 1,000 cubic feet.
Soap, household detergents, and gypsum will also become subject to the standard 14% VAT rate. According to parliament, the amendments are intended to enhance tax efficiency, promote fairness, support productive sectors, and strengthen the investment climate while contributing to fiscal sustainability.