The International Monetary Fund has welcomed a law on value-added tax passed by Egypt's House of Representatives on Monday as a historic achievement.

Chief of the IMF mission to Egypt Christopher Jarvis said in a statement released last night that the successive governments in Egypt have worked on the value-added tax law for years.

Jarvis thanked Finance Minister Amr el Garhi and his team for succeeding in formulating a new law for the tax that was sanctioned by the parliament.

The IMF top official welcomed extensive discussions held by the lawmakers on the law which helped create a consensus on taking this step.

Under the legislation, the VAT is to be set at 13 percent for 2016-17 and 14 percent for the following fiscal year.

The tax is intended to help increase the government revenues, reduce the public budget deficit and enable the collection of higher taxes from high-income brackets which will in turn be allocated for social expenditure directed to the needy people