Friday 08/Aug/2025 – 07:28 PM
The Egyptian Federation for Construction and Building Contractors continues its intensive moves to meet the challenges resulting from the recent legislative amendments to the value -added tax law, which was approved under Law No. 157 of 2025, and included raising the tax category from 5% to 14%, and transferring contracting activity from the schedule tax to the general price.
In this context, the Federation held its second meetings in less than a week with the officials of the Egyptian Tax Authority, to discuss the repercussions of the new amendment and seek to reach the mechanisms of application that guarantee the rights of contracting companies without prejudice to the state’s targets.
During the meeting, the Federation stressed that the construction and construction sector is one of the main pillars of the national economy, which requires facilitating the ways of practical application of the amendments, and avoiding direct damage to companies operating in the sector.
During the meeting, the Federation raised a number of fundamental problems facing the sector, while submitting proposals for solutions, most notably:
1. The lack of clarity of the mechanism of adjusting the price of current contracts, especially with individuals and the private sector, in contrast to what is applied with government agencies.
2. The necessity of providing a special model for acknowledging the churches and the former stockpile of law applying while ensuring the tax deduction.
3. Difficulty issuing electronic bills in remote areas and the need to provide alternative solutions.
4. Claiming continuously to exempt the payments provided by the tax unless it is matched by actual service performance.
5. The problem of the issuance of extracts after the implementation of the law and the consequent confusion between the old and new systems.
6. Determination of contracting tax by support entities in a way that may harm the contractor’s right to deduct the tax on his inputs.
7. Claiming the contractor’s right to deduct the tax on the acts actually implemented even if it is not approved by the consultant engineer.
8. The difficulties of applying the electronic invoice system to some contractors and informal employment.
9. The necessity of stipulating the entitlement of the general contractor to deduct the tax paid for the subconscious.
10. Amending the treatment of subconscious contractors claims that they do not violate their right to deduct the tax on their interventions.
11. Demanding the expansion of the scope of suspension of machinery and equipment to include service activity as well.
For its part, the Tax Authority affirmed its willingness to study the proposals submitted and work to remove the obstacles facing the sector, stressing the continued joint coordination between the two sides to achieve a balance between the interests of the state and investors.
It is noteworthy that the construction and construction sector includes more than 35 thousand contracting companies operating in the Egyptian market, including about 47 companies that have capabilities that qualify them to work in foreign markets, supported by experiences acquired from the implementation of major national projects during the past years.
