Uber starts paying VAT in Egypt
Uber's trouble in Egypt increasing
The problem that started in May 2018 is now of advantage to the Egyptian government. In May 2018, there was a lawsuit filed by the country’s taxi drivers, leading to Egyptian officials move to introduce a law that enforced stricter regulations on companies like Uber.
Fast-forward to February 18, and Egyptian officials con confidently reveal that Uber had agreed to pay VAT in that country.
This result is amazing since it potentially brings an end to the company’s long-running row with local taxi drivers. However, this seems like a little problem for the company since it will definitely eat into the company’s profit margins.
Abdel Azeem Hussein, head of the Egyptian Tax Authority said that this type of agreement and determining the tax treatment that will be applied to Uber and other companies operating in the same sector is meant to enhance confidence and cooperation between the authority and the tax community.
Already, Uber is seeing dark days as the company has been forced to halt its services in Hungary and Denmark. In other places, backlash against the management is rising.
VAT charge is 14 percent and will also be levied on other companies operating in the same terrain as Uber in Egypt, including Uber’s main competitor, Careem, a UAE-based start-up that claims to already pay the tax. But Hazem Ghorab, Careem Egypt’s Head of Corporate Communications, insisted that Careem was operating “in accordance with our compliance with Egyptian laws”, so it may not have to face such stringent issues as Uber had.
Lawsuits over the past year are on the increase for Uber and its competitors. In view of this Egyptian officials are calling for stricter regulations on transportation app companies. The situation got really heated when the country’s taxi drivers, alleged that Uber and Careem were illegally employing private vehicles and making use of them as taxis.
Even Uber an Careem drivers are alleged as not willing to pay their taxes. Local taxi drivers are preparing to bring up more accusations against Uber drivers.