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122,000 property tax appeals: Finance ministry - Daily News Egypt

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122,000 property tax appeals: Finance ministry

Fifth Settlement district paid highest value of taxes, spokesperson says


Approximately 122,000 taxpayers have submitted appeals to challenge the property tax they are to pay on their properties.

There have been 15 million taxpayers notified of taxes due to the government since the implementation of the law, spokesperson of the Ministry of Finance Ayman Qaffas announced in a Saturday statement. According to Qaffas, the value of property taxes is independently calculated by an independent committee of experts..

The Property Tax obliges taxpayers to pay 10% of the total value of their properties. The highest value of property taxes due was in the Fifth Settlement district in New Cairo, Qaffas said.

When the Property Tax Law became effective in January 2014, after being delayed several times since it was issued in 2008, the government expected it to bring in EGP 3bn in revenue.

The government announced that the added revenue would be allocated to addressing social issues. A quarter of the revenue was to be allocated to the development of the informal housing sector. Another quarter was to be allocated to improve citizen services.

However, the Tax Authority was not able to collect the targeted revenues after the law was enforced. In a July 2015 statement, an official at the Ministry of Finance expected annual revenues from the tax to not exceed EGP 400m. From July 2014 to May 2015, the Tax Authority was only able to collect EGP 380m from the property tax.

The Property Tax Law was amended in November 2013 to expand the tax-exempt tranche to include industrial and commercial units along with the normal residential tranche. Those who own EGP 100,000 in commercial and industrial units were exempted from the tax.

The most recent amendment to the law occurred in August 2014, when President Al-Sisi issued a decree modifying the tax-exempt tranche to include those who own one residential unit worth EGP 2m. The original law had exempted only those who own more than one residential property worth EGP 2m.

The latest revision to the law exempted hotels, clubs, hospitals, medical centres and clinics affiliated to the armed forces from paying taxes. Hospitals, educational institutions and non-profit charities have also been granted a tax exemption. However, tourism resorts and hotels remain subject to the law.

Residential properties with annual rental values less than EGP 24,000 are exempt from paying property taxes, along with commercial units with annual rental values less than EGP 1,200.

 

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