CAIRO, May 16 (Reuters) - Egypt's cabinet approved "in principle" a long-awaited value added tax (VAT) bill and will refer it to the Council of State, an advisory body to the government, before sending it to parliament for discussion, it said in a statement on Monday.

The long-delayed VAT draft law is part of a government fiscal reform programme aimed at cutting energy subsidies and reducing a ballooning deficit by introducing new taxes.

The law is expected to replace the current sales tax and broaden the tax base by subjecting all services to the tax while maintaining the principle of exempting basic goods and services that affect the poor, the statement said.

(Reporting by Asma Alsharif; Editing by Richard Balmforth)