CAIRO, Aug 29 (Aswat Masriya) - Egypt's House of Representatives approved on Monday the long awaited Value-added tax law.

The new law imposes a penalty between three-five years on tax evaders and a fine to between EGP 5,000-50,000.

The House had set on Sunday the VAT rate at 13 per cent for the year 2016-17 instead of the government's initial proposal of 14 per cent.

The 14 per cent rate will be imposed next year.

The VAT 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, according to a cabinet statement in May.

It is part of the government's reform programme, which includes cuts to expensive energy subsidies and the introduction of other new tax measures, in an attempt to cut spending and meet conditions for a $12 billion three-year loan programme from the International Monetary Fund.

The loan is still subject to the final approval of the IMF executive committee.