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 Minister of Finance, Mohamed Moeit, said that representatives of the Egyptian Tax Authority and Uber Egypt reached an agreement to collect VAT from the company, in accordance with Law No. 67/2016.
“This agreement comes as a result of the fruitful cooperation between the Tax Authority and Finance Ministry to settle any tax or customs conflict to push forward national economy,” the minister noted.
Moeit said this step was agreed upon during a meeting between the head of the Tax Authority and country director of Uber.
The agreement would also apply to other ride-hailing companies, Hussein said, adding that this step although Uber’s main rival Careem said it was already paying value-added tax (VAT) in Egypt, where the rate is set at 14 percent.
“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.
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.
Uber riders and drivers in Egypt have said they faced various technical difficulties with the Uber app in recent weeks.
Uber has faced regulatory and legal setbacks around the world amid opposition from traditional taxi services. It has been forced to quit several countries, including Denmark and Hungary.
Uber has said that Egypt is its largest market in the Middle East, with 157,000 drivers in 2017 and 4 million users since its launch there in 2014.
