CAIRO: Egypt is set to launch a groundbreaking electronic invoice (e-invoice) system on Sunday.

Minister of Finance Mohamed Maait announced the launch of the first phase of the electronic billing system, which will be the first in the country’s history.

The minister said several companies will join the system in succession until the end of June 2021, adding that the program is an important step in digital transformation as part of Egypt Vision 2030.

It is also a major step in developing the tax system and raising the efficiency of tax examination, which contributes to reclaiming the rights of the state’s public treasury in a way that helps achieve financial and economic goals. It will also enable Egypt to complete its development path and improve citizens’ standard of living.

Maait said the e-invoice system will “revolutionize” integration between the tax system and the commercial community, in order to “transform the informal economy into the formal economy.”

He added that Egypt is one of the countries leading the way in the Arab world in implementing an e-invoice system as part of a digital transformation project. The minister said the system has been closely followed and supported by the country’s political leadership.

Maait said the Ministry of Finance and the Tax Authority will provide support to companies for compulsory entry into the e-invoice system. He warned that legal measures will be taken against companies that refuse entry, including prosecution in accordance with the provisions of the new unified tax procedures law.

The minister said the new system will allow the instant exchange of data for invoices in digital form.

He said the e-invoicing will help the digital transformation of commercial transactions and will use cutting-edge technology that will formally validate the data of sources, recipients and invoice contents.

The new system is also set to bring further benefits, including increased limitations on Egypt’s black market and informal economy, Maait added.

According to the latest economic census by Egypt’s Central Agency for Public Mobilization and Statistics, the size of the informal economy included 53 percent of the country’s businesses, which employ about 4 million, or 29.3 percent of the workforce.

The volume of money invested in the sector amounted to 69.3 billion Egyptian pounds ($4.4 billion), representing about 5.1 percent of the paid-up capital of Egypt’s total economic activity.

Egyptian economists and finance experts estimate the size of the informal economy in Egypt at $395 billion — about 50 percent of the country’s economy.

The informal economy, represented by mostly small, medium and micro-sized enterprises, is not subject to quality or tax supervision.

Informal or black market businesses are spread across Egypt in the form of street vendors, markets, food carts, restaurants, factories and unlicensed real estate.