And just what is exempt?To tax or not to tax: this is the question [Archives:2004/707/Business & Economy]

January 29 2004

The draft law of the general tax on sales has aroused a large-scale controversy, this time among the population, the consumers and tradesmen regarding the commodities exempted from the tax, and whether the law is in the interest of the consumer or against him. The table No.1 has clarified the kind of local and foreign goods exempted from the sales tax that covered 27 commodities.
The commodities included in the exemption are: wheat, bread, liquid and dried dairies, vegetable and animal ghee, broiled eggs, meats, poultry, animal wealth products, dates, vegetables, fruits, coffee, honey, tea, biscuits, soap, all kinds of medicines and children health supplies.
The list also included ambulance cars and transportation from ports, books, notebooks, pens, ink and spare parts for tools and equipment.
The law has also exempted from the sales tax construction materials like bricks, blocks and tiles. It has also exempted ploughs, harvesters, seeds and fertilizers and inputs of fish products as nets and fishing boats, as well as fodders for poultry and cattle and sheep.
Table No.2 annexed to the law included the commodities and services subject to the general tax on sales at 0% rate, which are exports and services of navigation and navy services related to those of civil aviation and services of ports and overland transportation.
Table No. 3 included local and imported commodities included in the production an consumption tax such as benzene, solar, kerosene, oils and lubricants at a percentage of 2% of the selling price to the consumer, the liquefied gas at a percentage of 0.5% of the selling price to the consumer, the gas oil, and all oil products at a percentage of 1% of the selling price to the consumer in addition to locally-produced cigarettes at a percentage of 6% of the selling price to the consumer and the locally-produced cigarettes bearing a foreign mark at a percentage of 65%, the imported cigarettes at 80%, the qat at 20%, cement at 5%, steel at 5%, wood at 5%, aluminum at 5%, cars spare parts at 5% and cars at 25% of the selling price to the consumer.
The sales tax imposed 5% tax on metal sheets, ready-made clothes, cloth, shoes, gold and metals of their selling price to the consumer.
The table 4 annexed to the law included the local and imported services exempted from the general tax on sales. Most important of them are one-star hotels services, maintenance services, legal and accountancy services and services of food offered by second-class restaurants.
This table has also included financial services exempted from tax in banking dealings, works in stock exchange markets, insurance services, and health, treatment and education services and also services of non-governmental organisations, waters, constructions, contracts and pilgrims.