Property tax will hamper industry sector: FEI



Fri, 04 Aug 2017 - 08:00 GMT


Fri, 04 Aug 2017 - 08:00 GMT

Factories in Egypt - Faris Knight via Wikimedia Commons

Factories in Egypt - Faris Knight via Wikimedia Commons

CAIRO - 4 August 2017: The Taxes and Duties Committee at the Federation of Egyptian Industries (FEI) is discussing demands of manufacturers to exempt industrial activities from property tax, which the government seeks to impose as part of its economic reform program.

Head of the Taxes and Duties Committee at the FEI Mohammed el-Bahi told Egypt Today that his committee is calling the Finance Ministry to exempt around 7,000 stalled factories from property tax as a first phase.

He said that these stalled factories represent 20 percent of the factories operating in the Egyptian market, adding that they will not be able to pay the tax due to their financial crises.

Additionally, Bahi said that his committee is asking the ministry to exempt the factories’ unused lands from the tax, and that the committee is in continuous meetings with the head of Egyptian Real Estate Taxation Authority to reach a suitable deal regarding this issue.

Companies and factories that fall under the control of the public business sector will suffer the most from the imposition of such tax, Bahi said, due to the abundance of lands and properties they own.

He added that these factories are already suffering from a decline in their production volumes and profit margins.

Head of the Engineering Industries Chamber at the FEI Mohamed el-Mohandes told Egypt Today that the current economic climate is not appropriate to impose new taxes on industrial activities.

He said that industries are already paying a bundle of taxes, including the Value Added Tax (VAT) and profit taxes, in addition to the tax collected from the consumer for the final product, so “why we need to impose new taxes,” Mohandes asked.

He added that the imposition of such tax will impose a new burden on the industries, hampering investment in the sector.

Mohandes said that the industry sector is a key driver for development, creates jobs and a source to increase exports, so it needs to be developed instead of imposing new burdens on it.

The Parliament’s Industry Committee has previously said that exempting stalled factories from the tax will encourage investment and boost the industry sector.

The Industry Committee’s Head Ahmed Samir told Egypt Today that the committee is in contact with the Trade Ministry to find ways to reopen stalled and closed factories.

He added that the committee is now preparing a new legislation that allows the exemption of factories from property taxes, especially the working ones.



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