The taxes to be collected from flight tickets are expected to reach EGP 600m annually, increasing by EGP 330m, said Head of Egyptian Tax Authority Abdel-Moniem Matar.
Mater said that taxes received from flight tickets total EGP 270m per year.
“The decision was made between the Ministry of Finance and the Ministry of Civil Aviation following a request form the civil aviation ministry,” Matar said.
An unexpected presidential decree was issued on Thursday to increase the taxes applied on plane tickets. Taxes applied on business and first-class tickets increased by EGP 100 to reach EGP 400, instead of the previously applied EGP 300. Taxes applied on economy-class tickets also surged by EGP 50, to EGP 150.
The Minister of Civil Aviation Hossam Kamal said that the average increase of taxes, taking into consideration current prices, is about 1%. He added that this increase has been applied for years on Egyptian and international companies operating in Egypt.
The taxes are applied for tickets that begin their international flights from Egypt, therefore domestic flights will be excluded. Flights that begin their travel from outside Egypt will also be excluded.
The Ministry of Finance is expected to apply amendments on the value-added tax, which it will post on its website for community dialogue.
On its effect on inflation, Dimian said that the government expects the tax to increase the prices of products, except for food commodities, by 1.3% or 2.6%.