E-commerce with new face, regulations

 Running an online business is definitely attractive to many people. However, a set of challenges do arise and basic business principles should be considered.

Indeed, online is just a channel which enables the business reach any customer everywhere with the right offering.

“I sell make-up, skin-care and hair-care products – both imported and local,” said Sara Moustafa, who manages a Facebook page to offer her products.

“Recently, I’ve started selling girls’ accessories,” she added.

Digital selling in Egypt goes through online shopping platforms and social media by creating pages and accounts offering products for sale.

Moustafa went on to say that she is into cosmetics products but they are costly. So, she tried to cast around the sources and the wholesalers to get the best prices, then she came up with setting up her own online business.

“It took two or three months to find a trusted wholesaler selling original branded products, as well as carry out a feasibility study,” she told the Egyptian Mail.

According to a 2019 report by the United Nations Conference on Trade and Development, digital economy ranges between 4.5 per cent and 15.5 per cent of the global economy.

Moustafa said that the selling point of her business is the competitive prices, which are less than the traditional stores by around LE30-LE100 for each product, besides the high-quality brands, thanks to the lower overheads.

Reda Abdel Qader, Head of the Egyptian Tax Authority, said: “Companies and businesses selling goods and services on the Internet are obliged to register with the tax authority.”

“Otherwise, they will be charged with tax evasion. Businesses with more than LE500,000 turnover must register for value-added tax,” he added.

Amr al-Mounir, former Egyptian deputy finance minister and international tax expert, said that taxation of online purchasing is a significant, long-awaited step, since the traditional economy has witnessed radical changes.

“Of course, I heard of the news about registering with the tax system. I see that small- and medium-sized online businesses can’t afford taxes due to unstable income and market,” Moustafa said.

Meanwhile, most growing online businesses find themselves in an arduous situation as they try to abide by the new taxes policies.

Such a step is considered by financial experts as the initial in achieving tax justice. Likewise, many countries have already instituted some measurements to levy equal taxes on online and traditional businesses.