CAIRO: In a move towards amending the tax system and increasing Egypt’s tax revenues, the Egyptian Cabinet approved Monday a presidential decree for amending real estate tax Law 196 of 2008, according to the Cabinet’s homepage.
The amendments include counting the real estate taxes on the calendar year, not the fiscal year as a step for unifying the collection system, it said. Also, committees of experts will be formed to value and assess the rental value of construction projects, and a senior appeal committee will be assembled to finish the submitted appeals of citizens.
Under the new amendments, real estate units that have less than 24,000 EGP ($3,356) in net annual rental value will be exempted from paying taxes. Commercial units with less than 1,200 EGP net annual rental value will also be exempted from paying taxes.
Besides the pre-mentioned exemptions, the buildings owned by registered associations, labor organizations, educational institutions, hospitals, clinics, shelters, nonprofits, political party headquarters and trade unions also will be exempted from paying real estate taxes, according to the original text of Law 196.
Minister of Finance Hani Kadry previously announced that he would amend the tax system by imposing progressive taxes, wealth taxes and real estate taxes as a step for covering the budget deficit and increasing Egypt’s tax revenues.
Tarek Farrag, an advisor to the finance ministry on real estate taxes, said that the new real estate tax will bring in between 3 billion to 4 billion EGP annually, according to a phone interview with Ala Essm Masr TV Channel.
“The real estate taxes will be counted on the annual rental value for a building,” he said, pointing out that 30 percent of the rental value tax will not be assessed to account for maintenance and administrative expenses.
Farrag also said the assessing committees will be assisted by specialized engineers from Ein Shams University to determine the rental value of buildings.