Tourism Minister Hisham Zaazou and Finance Minister Hany Kadry Dimian are scheduled to meet this month in efforts to resolve the dispute between the Real Estate Taxation Authority (RTA) and the Chamber of Hotels.
The crisis centres on the criteria used for the application of the property tax law on hotels.
This comes despite amendments made by President Abdel Fattah Al-Sisi to the property tax law last August, according to a senior Ministry of Tourism official.
The official, who preferred to remain anonymous, said: “Last August there was a meeting between Tourism Minister Hisham Zaazou and Finance Minister Hany Kadry Dimian and the Chamber of Hotels and the RTA, but the circumstances prevented the issue from being resolved.”
“The RTA still insists on calculating the real estate property tax according to the market value of the property, and as a result they will raise the burden on tourist establishments by more than 500% on historic hotels overlooking the Nile,” the official said.
The Chamber of Hotels had requested the replacement value be used instead of the market value to calculate the real estate tax on hotels, which have been under strain since the 25 January Revolution.
The official predicted that the conference will be held this month to reach an agreement over the criteria in light of the deadline set by the law after the amendment.
According to the official, the expected revenues from the real estate tax ranges between EGP 750m and EGP 1bn in the event the market value of the land being used to calculate the tax.
Egypt’s tourism income declined to $5.9bn last year, a 41% decline from the year before.
“The Ministry of Tourism hoped to have had the imposition of the real estate tax on the tourism industry be delayed for at least two more years until signs of recovery but the difficult economic conditions that Egypt is experiencing have prevented this from happening,” the ministry official said.