Wednesday,18 July, 2018
Current issue | Issue 1315, (13 -19 October 2016)
Wednesday,18 July, 2018
Issue 1315, (13 -19 October 2016)

Ahram Weekly

Lawyers demand exemption from VAT

The Lawyers Syndicate wants legal services exempted from VAT on constitutional grounds, writes Ahmed Morsy

Al-Ahram Weekly

The Administrative Court of the State Council will begin hearing a lawsuit challenging the Value Added Tax (VAT) law on 23 October. The suit, filed by head of the Lawyers Syndicate Sameh Ashour, asks for the VAT law to be repealed on the grounds that it “violates technical, scientific and legal standards” applied internationally. The lawsuit is filed against President Abdel-Fattah Al-Sisi, Prime Minister Sherif Ismail and Finance Minister Amr Al-Garhi.

Parliament approved the VAT law on 28 August. It came into force in September after being ratified by the president.

Under the new VAT law, lawyers’ fees — which it classifies as “professional and consultative services” — are subject to a 10 per cent tax.

Lawyers object to the classification, arguing that they should not be subject to VAT since their work does not involve goods, and the law fails to clearly define “professional and consultative services”.

The suit was filed two days after dozens of lawyers protested against the VAT law in front of the Court of Cassation in downtown Cairo. A similar protest was held in Alexandria. In both demonstrations lawyers chanted slogans against the VAT law and carried placards demanding the tax be scrapped.

The suit claims the new law is incompatible with the Lawyers Syndicate’s own legal regulations. Ashour has also been quoted in the media saying the new law is unconstitutional because it violates constitutional guarantees that defence and other litigation be conducted without the payment of tax.

Following Saturday’s protests the syndicate arranged a meeting, chaired by Ashour and attended by provincial branches, to discuss the impact of the VAT law on its members. The meeting ended with participants agreeing to postpone any further action until 7 October, allowing time for discussions between the syndicate and the Tax Authority and Finance Ministry on ways to exclude lawyers’ services from VAT, to be held. The meeting also instructed provincial branches to arrange open seminars for farmers and workers to highlight the impact of VAT on their lives.

“Imposing VAT on goods and services across the board undermines attempts to promote social justice,” said Ashour.

Ashour has complained the position of the syndicate against the VAT law is being distorted in the media.

“The syndicate’s opposition to the law is on purely legal and constitutional grounds. Our objections are addressed to the law, not the nation or the state. While continuing to object against the law we will not allow interference from political factions seeking to exploit the battle being waged by lawyers and distort its purposes,” said Ashour.

VAT is a central plank of the government’s economic reform programme which seeks to reduce the budget deficit by, among other measures, slashing energy subsidies and introducing new taxes. The programme is widely viewed as a prerequisite for obtaining a $12 billion three-year loan from the International Monetary Fund (IMF).

Montasser Al-Zayat, a former candidate for the post of Lawyers Syndicate head, backed up Ashour’s apolitical approach. “The stance of lawyers opposing the VAT law is not a political one,” Al-Zayat said in a press conference earlier this week.

He nonetheless added that the current syndicate council had failed to defend the interests of lawyers. “The council failed because it waited until the VAT law was issued before opposing it. It should have made its objections clear from the moment the law was first mooted,” said Ashour’s rival in the last syndicate elections.

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