UAE-based buy now, pay later platform Tabby will suspend operations in Egypt, just six months after entering the market.
“In a short period of time, we have seen very strong adoption of our products and services with some great merchant partners,” Tabby chief executive and co-founder Hosam Arab told The National.
“However, as with any business, we must prioritise projects that align with our long-term goals in core markets, and as a result, we have decided to pause our commercial operations in the Egyptian market.”
Tabby, founded in 2019, offers consumers interest-free, flexible payment options for online and in-store shopping. It operates in the UAE, Saudi Arabia, Kuwait and Bahrain and expanded to Egypt in September.
In a leaked e-mail to merchants explaining the “difficult decision”, the Tabby team said, “recent macroeconomic developments have made our operating model challenging while maintaining our principles of interest-free payments”.
As of March 23, customers will no longer be able to make new purchases using Tabby in Egypt.
Sellers were told to remove all Tabby branding from their shops, websites and apps by that date.
No date or timeline was given for a possible resumption of Tabby’s Egypt operation.
“Our confidence in Egypt’s potential in the region remains unchanged and we hope to one day revisit this decision,” the e-mail said.
There will be no lay-offs and Tabby will continue to invest in growing its team on the ground, who will refocus on supporting its core markets, Mr Arab said.
Egypt is suffering from the economic fallout from the Russia-Ukraine war, including a higher import bill and record inflation. It has devalued its currency three times, with the pound now at 30 to the US dollar, compared with 16 a year ago.
The country’s annual inflation rose to more than 25 per cent in January, the highest in more than five years.
High inflation has driven the popularity of BNPL globally, with consumers taking advantage of short-term financing to spread their payments and better manage their money.
Global BNPL transaction values are projected to grow to $576 billion by 2026, up from $120 billion in 2021, according to data analytics company GlobalData.
The effects of global macroeconomic challenges on Egyptian start-ups have been mixed, with some seeing an opportunity and others experiencing lay-offs and a funding crunch.
For example, Nasdaq-listed Swvl let go a third of its workforce last May and its market capitalisation has plummeted from $1.5 billion to about $11 million.
Tabby is one of the most well-funded start-ups in the Mena region, raising $58 million in its latest series C round in January at a valuation of $660 million.
Investors included PayPal Ventures, Sequoia Capital India, Saudi Arabia’s STV, Mubadala Investment Capital, Arbor Ventures and Endeavor Catalyst.
It secured $150 million in debt financing last August from US-based Atalaya Capital Management and Partners For Growth.
The company also raised $54 million in its series B last March and $23 million in its series A in December 2020.
Egyptian start-ups raised $517 million last year, compared with $501 million in 2021, according to data platform Magnitt. Egypt led the Mena region with 160 deals, a 3 per cent decline from 2021.
“We remain optimistic about the future of the Egyptian market and will continue to assess opportunities to re-engage in the future,” Mr Arab said.
In numbers: China in Dubai
The number of Chinese people living in Dubai: An estimated 200,000
Number of Chinese people in International City: Almost 50,000
Daily visitors to Dragon Mart in 2018/19: 120,000
Daily visitors to Dragon Mart in 2010: 20,000
Percentage increase in visitors in eight years: 500 per cent
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
Name: Peter Dicce
Title: Assistant dean of students and director of athletics
Favourite sport: soccer
Favourite team: Bayern Munich
Favourite player: Franz Beckenbauer
Favourite activity in Abu Dhabi: scuba diving in the Northern Emirates
MATCH INFO
What: Brazil v South Korea
When: Tonight, 5.30pm
Where: Mohamed bin Zayed Stadium, Abu Dhabi
Tickets: www.ticketmaster.ae
SERIE A FIXTURES
Saturday (All UAE kick-off times)
Lecce v SPAL (6pm)
Bologna v Genoa (9pm)
Atlanta v Roma (11.45pm)
Sunday
Udinese v Hellas Verona (3.30pm)
Juventus v Brescia (6pm)
Sampdoria v Fiorentina (6pm)
Sassuolo v Parma (6pm)
Cagliari v Napoli (9pm)
Lazio v Inter Milan (11.45pm)
Monday
AC Milan v Torino (11.45pm)
