Implementation of property tax law to be postponed, Egypt’s Cabinet

Ahram Online, Wednesday 5 Dec 2012

Enforcement of the property tax law will be postponed until July 2013 from the previously announced date of 1 January

property tax law
File photo: A view of luxurious houses at the gated-community city of Palm Hills, 13 miles west of Cairo, Egypt June 26, 2008 (Photo: Reuters)

Egypt’s Cabinet took the decision to postpone once again the implementation of the property tax law issued in 2008 until July 2013 instead of January, the MENA news agency reported Wednesday

The Cabinet also introduced amendments to the law exempting single house owners from the tax and raising exemption levels for properties to LE2 million up from LE500,000

Educational institutes, hospitals and other charity institutions will be exempted unless profit-oriented organisations.

The original bill was proposed under Hosni Mubarak and approved by parliament in 2008. But neither Mubarak’s regime nor any post-revolution government implemented it.

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

The exemption failed to convince many about the law’s justness. 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 LE500,000 pays no tax while an individual who owns only one flat higher than ceiling could be liable.

Many economists have criticised the suspension of the law after the revolution at a moment when the state needs revenues.

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

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