Al-Sisi exempts army institutions from real estate tax

Clubs, hotels, complexes and medical centres owned by the armed forces will be exempt from the property tax following a decree issued by Egyptian President Abdel Fatah Al-Sisi yesterday.

The law was approved by the government last July and provides “exemptions from taxes for clubs and hotels belonging to the armed forces, as well as complexes, medical centres, hospitals, military clinics, real estate and other units to be specified by the secretary of defence, with the agreement of the respective minister.”

Observers pointed out that this will increase the limit of exemptions and privileges obtained by the army in spite of the huge budget allowance the military has from the State Treasury, which amounts to about 48 billion Egyptian pounds ($6.7 billion) during the current fiscal year (2014/2015).

The president, who previously held the role of minister of defence, agreed to the article without modification, throwing out observations proposed by the Legislative Department of the Council of State on the bill during the review in April where they objected to the exemptions.

The article says that “in all cases, none of these military units are subject to the limited assessment of the committees and the limited appreciation, despite the required considerations of the defence and national security that are given.”

Observers said that the decree means only the defence minister has the authority to identify which parties are exempt from paying estate taxes, despite the fact that all units of the armed forces make a profit.

Western estimates claim the Egyptian Army controls 40 per cent of the economy.