The Ministry of Finance has now approved a new regulation put forth by the Egyptian Tax Regulatory Authority in February of this year. The laws passed and approved do not target all Egyptian tax payers, however. It is a means to push forward the digitization of the government and a huge boost for FinTech in Egypt. The law now requires “third tier companies,” as described in legal documents, to start producing digital receipts and financial documentation effective the 15th of May.
The law has several more requirements as well. It elaborates on the kind of requirements that go along with the incorporation of digital receipts. It is also worthy to mention that requiring digital receipts meant that the Tax authority and Ministry of Finance had already activated their digital systems. Further requirements included extracting an electronic signature and barcodes of GS1 or GSC encryption. It is not yet clear what the barcode is for but it will probably be used as another form of processing the company’s data.
After the barcode and digital signature are created the upcoming step is to sign up for digital payment electronically using the tax record number of the company. The creator account has to belong to the company’s admin and so they would have to fill in a few personal details such as their ID number, email address, and phone number. For companies to activate a digital receipt system they would need to subscribe to an ERP system as most corporations and entities nowadays have. While the mentioned above requirements are only a must on third-tier companies, smaller businesses were strongly encouraged to apply the electronic payment system thus progress into a digitalized, more sustainable economy.
The law is definitely revolutionary especially compared to the archaic systems still adopted by some government entities in Egypt. Electronic payments provide much more flexibility, reliability, and are strongly not prone to falsification. In addition, digital government systems combat corruption and bureaucracies both of which would give Egypt more points as an investment destination along with the fact that it is one of the biggest markets in the region. Digitalization is definitely the way to go and that is definitely a belief the current Egyptian government is willing to go by.
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