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Egyptian property taxed under fruitless 1954 law

Egypt's minister of finance follows the suspension of the controversial 2008 property tax law by confirming that the old one remains in effect

Marwa Hussein, Wednesday 1 Jun 2011
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Egypt’s old property tax law will remain in place until the new law promulgated in 2008 is amended, Samir Radwan, the finance minister, said in a statement today.

The declaration came after interim Prime Minister Essam Sharaf announced the suspension of the new law, which had never been implemented.

The old law, issued in 1954, imposes a higher tax percentage but doesn't include a regular revision of a property’s value. As a result, the tax imposed is much lower than that imposed by the new law.

The 2008 law was criticised for increasing the tax burden on the middle class, though it exempted owners whose property is worth less than LE500,000.

The exemption failed to convince many about the law’s justice. In fact, the law gives some real estate developers the chance to escape paying the tax as it is imposed on the unit and not the person. Consequently, a developer who owns hundreds of units each worth less than half a million pounds pays no tax while an individual who owns only one flat could be liable.

The suspension of the new law didn’t generate any more than a sense of relief from homeowners.

However, the decision was met with criticism by some economists. "I can understand that the government increases the exemption level not to put extra pressure on the middle class, but to suspend it in a moment where the state needs revenues is not the right decision, owners of palaces and villas should pay the tax," said Samer Soliman, assistant professor of political economy at the American University of Cairo.

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