The Administrative Court decided to postpone lawsuit that demands cancellation of the Electricity and Water Authority’s (EWA) decision to apply the 5% VAT on its services to the 24th of February for final sentence.
In his official reply to the government’s representative in the third hearing session, lawyer Mohammed Al-Thawadi stated that the government’s representative’s reliance on the decision on VAT unified agreement was incorrect as article 29 of the agreement did allow applying tax on electricity. Al-Thawadi earlier has filed a lawsuit to the Administrative Court in which he demanded to immediately cancel Electricity and Water Authority’s (EWA) decision to apply the 5% VAT on its services.
Al-Thawadi, who filed the lawsuit against the Minister of Electricity and Water Affairs and EWA’s CEO, stated that the fact is contrary as the unified agreement gave the right to the state to exempt certain sectors from payment or tax in accordance with local law. In addition, he stated, article number 30 explicitly of the agreement stipulated that government agencies should be exempted from paying taxes.
Al-Thawadi added that the defendants’ reliance on imposing the added value of Decree No. (43) of 2018 is unconstitutional as Articles 15 and 107 of the Constitution stipulate that taxes are imposed only by law.
The court decided to postpone the case to for its final sentence on the 24th of February.
It is worth mentioning that the government’s representative stated in his reply that there is nothing preventing rivals to compete with EWA in providing electricity and water services. Pointing out that in accordance with that, EWA is not engaged in a sovereign role of monopoly, as nothing prevents the rival in providing services.