Parliament also gave final approval for amendments to laws regulating non-residential rents, the capital market, real estate registration, and the Egyptian Health Council.
Parliament speaker Hanafi Gibali said in a plenary session on Tuesday that "in line with Article 71 of the House's internal bylaws and as a large number of MPs rejected the amendments to the income tax law in principle, I decided to refer the draft to the Budget Committee to study it again and take MP's remarks into account."
Gibali's decision received much praise and applause from MPs who said they oppose imposing a tax on sales of real estate.
The amendments stated that a new paragraph would be added to Article 42 of the income tax law, stating that a tax on the handling of properties or construction land contracts would be imposed and that this tax would be divided into four brackets.
A report by the House's Budget Committee said the draft law aims to collect a 2.5 percent tax on sales of properties and construction land – not including land in villages.
"There will be four tax brackets: those valued up to EGP 250,000 will pay a tax of EGP 1,500; those valued from EGP 250,000 to EGP 500,000 will pay a tax of EGP 2,000; those valued at EGP 500,000 to EGP 1 million will pay a tax of EGP 3,000; and those valued at more than EGP 1 million will pay a tax of EGP 4,000," said the report.
The above amendment faced objections from MPs, including majority and opposition ones.
Soliman Wahdan, the parliamentary spokesperson of the liberal Wafd Party, said his party cannot approve such a law.
"Imposing such a high tax on sales of properties will discourage citizens from documenting their properties at Real Estate Registration Offices," said Wahdan.
Tarek El-Khouli, an MP affiliated with the parliamentary majority party of Mostaqbal Watan, accused the minister of finance of adopting an aggressive tax policy that poses a threat to social peace and stability.
"We see that the finance minister insists on imposing taxes on citizens in a way that does harm to social security and without seeking other sources that can support the state treasury," said El-Khouli.
Mahmoud Badr, another majority MP, accused finance minister Mohamed Maait of lacking "political sense."
"At a time when citizens are suffering from economic hardships, Minister Maait comes to exert greater pressure on their lives through this new tax," said Badr.
In response, Maait said taxes collected from housing unit contracts reach EGP 8.5 billion a year, and with the passing of this law they are expected to increase to more than EGP 9 billion.
"This is necessary to support the state treasury," said Maait, who dismissed the accusation that he lacks political sense.
"I have a strong political sense, especially as I have served my country for more than 15 years," said Maait.
MP Yasser Omar, deputy chairman of the Budget Committee, said the new law does not affect limited-income citizens who own property, and that "the amendments were drafted by the justice ministry, not the finance ministry."