The Real Estate Tax Authority (RETA) is about to instate the article 196 real estate tax law, four years after it was first issued, according to head of RETA, Tarek Farag.
Farag made the announcement during a seminar to the Association of Taxes Experts. “People who are supposed to pay real estate taxes can do soon two installments; the first should be from January to the end of June, the second from July to the end of December,” said Farag.
Companies that have already published their yearly budget reports according to the old system should abolish them, because taxes will be paid off for only 2013, he added.
Farag declared that the RETA has sent out questionnaires to hotels, tourists, industrial and services installations to use their data as a fair base to estimate non-residential real estate units. It aims to thereby implement a fairly estimated tax.
The RETA claims it has implemented many criteria to guarantee the highest level of compliance. It bills the measure as a way to impose taxes on the wealthy and redistribute wealth towards developing poor districts.
“Real estate taxes won’t add additional burdens on society, as the new law will give more privileges and exemptions for real estate units, as it exempts units less than EGP 500,000, in addition to exempting old units. The Ministry of Finance has submitted several legislative adjustments to the dissolved parliament, however until now no changes came into effect,” said Farag.
“The private sector considers the old real estate tax law unfair, since it obligates only those who live in the Nile valley cities to pay taxes, and not newly established cities and their residents,” said the head of Egyptian Tax Experts Association, Ashraf Abdel Ghany.
Farag promised to meet with the mining sector to clarify the nature of mining, as it was the first time to address mining in the context real estate taxes.
Twenty eight banks, including the National Bank Egypt (NBE), will offer an electronic system for government payment to accept all electronic financial transactions, to assist payment of real estate taxes. Each EGP1 billion paid electronically will save EGP2 million annually, said the CEO of an E-Finance company, Ibrahim Sarhan.