A senior official at Egypt's Ministry of Finance said that his ministry is currently seeking to speed up the implementation of the real estate tax law, and to address the entities subject to the law so as to start collecting the new tax from them. The official noted that the new tax will be imposed on oil fields in Egypt too.
On Tuesday, Egyptian President Abdel Fatah Al-Sisi issued decree 117/2014 amending certain provisions of the Property Tax Law 196/2008. The amendments approved by Al-Sisi state that the criteria should be developed by the finance minister in cooperation with relevant ministers within three months from the ratification of the amendments with regard to the evaluation of industrial, tourism and petroleum facilities, as well as airports, ports, mines, quarries, and other similar facilities of special nature, for the purpose of determining their tax base.
According to the law, property tax is set at 10 per cent of a unit's rental value and three per cent of a unit's capital value, whether the unit is allocated for private accommodation or for other purposes.
The official told the Anadolu news agency that the recommendations issued state that the oil fields are subjected to the property tax on the grounds that the screw conveyors used to extract oil and gas qualify as property, especially because there is no clear deadline to the end of the extraction of oil from the field.
He said that after the State Council's recommendations, the Ministry of Finance addressed the Ministry of Petroleum requesting data about all oil fields, whether in the sea or in the desert or elsewhere.
The Egyptian Holding Company for Airports had filed a lawsuit demanding that it be exempt from the tax. The court ruled in favour of the company on the grounds that it is a government body, the tax still applies to all private airports.
The government aims to collect 3.5 billion Egyptian pounds ($490 million) in the first year of this tax. Fifty per cent of revenues from this tax are to be allocated to slums and other municipalities.
Family homes are exempt from the property tax, however all additional units are subject to it.