Last Wednesday marked the deadline for companies to join the e-invoicing system set up by the Egyptian Tax Authority (ETA).

An electronic invoice (e-invoice) is a digital document that records the purchase and sale of goods and services. As part of the ETA system, they are signed electronically and are sent or received in real time and are then verified by ETA.

This electronic invoicing system is characterized by a unique number assigned to each invoice and a unified form and content for each invoice within the system.

According to ETA, some 2,273 companies have uploaded electronic documents to join the electronic invoicing system, with a total of 44 million electronic documents registered to date.

The electronic invoice system launched its first mandatory phase in mid-November last year, requiring 134 companies to register. The second phase was applied on February 15, 2021, covering 347 companies. The third and final phase, which ended on September 15, included all other businesses registered with the ETA Taxpayer Center.

ETA has warned non-compliant businesses that have not joined the system that they will face legal action from October 1 and will be excluded from the top taxpayer category. This means that they will lose technical support and assistance, including export subsidies.

He said businesses and other legal persons are required to register their sales and purchases on the electronic system. After joining the electronic invoicing system, they will be required to register their sales and purchases on the ETA electronic system in accordance with Article 35 of the Unified Tax Procedures Act.

A tax invoice or receipt in electronic form must be issued in accordance with article 37 of the same law. Companies not covered by the mandatory decision (not large taxpaying companies), according to ETA, can use the electronic invoicing system if they wish.

An electronic receipt system will kick off with the experimental operation of the Unified Tax Procedures Automated System which will launch for high and middle income businesses at the end of December.

Finance Minister Mohamed Maait said in a press release that the first phase of the electronic receipt system will be implemented within six months and is based on a central electronic system that allows ETA to monitor all business transactions. of goods and services between businesses and consumers. (B2C) in real time.

“This will help to integrate the informal economy into the formal economy, reduce tax evasion, establish the foundations of tax justice, achieve equal opportunities in the Egyptian market and facilitate tax audit procedures.” as soon as possible, ”he said.

He added that the ministry is moving forward with the implementation of a national project to modernize and automate tax and customs systems, saying that artificial intelligence (AI) technologies will be used to facilitate and digitize procedures in 2022 to ensure that all online business transactions are monitored and controlled.

The electronic invoicing system has so far revealed 1,700 tax evasion cases, worth a total of LE 3 billion, he said.

One of the companies that joined the system, the Juhayna Group, said the electronic invoicing system has affected the way it does business. In a press release, the company said the system saved it time and effort by only dealing with people and companies registered for tax purposes and recording tax audit data.

However, he said there had been difficulties in importing sales invoice scans from ETA’s electronic invoicing system as it was difficult to import thousands of invoices per day while sales daily business is estimated at around 15,000 invoices.

“We hope this will be corrected by ETA soon,” the company said.

Mohsen Abdel-Aziz, deputy head of the technical office of the Egyptian Association of Young Entrepreneurs, said the electronic invoicing system has both short and long term benefits.

In the short term, the system would verify company documents before they are issued, improve the tax status of companies by classifying them as low risk, update and expand the exchange of invoices, and d ‘Helping companies prepare reports and perform quick and accurate analyzes, he said.

Long-term benefits include reduced administrative tasks such as the need to archive paper invoices, reduced audit procedures, and easier tax refunds.

“All of this will help support the integration of the informal economy into the formal economy,” he concluded.

* A version of this article is published in the September 23, 2021 edition of Al-Ahram Weekly

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