Finance Minister Hany Kadry Dimian said current real estate taxation is hindered by significant payment issues despite not being applied for the lower and middle classes. He said that only 10% of housing units pay the tax, which will not exceed a very small part of the housing unit price annually.
Dimian announced in a statement that anyone who owns a house worth less than EGP 2m will be exempt from taxes. Those who own real estate worth EGP 5m will pay a tax of EGP 3,500 annually, or EGP 291 monthly. This legislation allocates 50% of the tax payments for the development of slums and poor areas.
During a meeting with the Rotary Club of Heliopolis on Tuesday, Dimian added that the government began issuing public payment machines for all governmental payments. This includes customs, taxes, and rent, which will help provide around EGP 3m-4m to the state treasury.
The minister said that the tax system is facing an issue in dealing with freelance professions, the total amount for which jumped from EGP 333m to EGP 1bn during fiscal year (FY) 2013/2014. Studies, however, confirm that the actual amount should not be less than EGP 7bn.
Dimian also stated that the economy will not grow unless the energy gap is filled. This gap has resulted from over-subsidisation of energy products in the long run, and the flow of energy-intensive investments, as the government could not withstand increasing demand.
He said that overcoming the energy deficit can only take place through encouraging the private sector to invest, while still trying to limit subsidisation, and depend on solar energy, coal, and waste.
When asked about ministry efforts to reform and develop the health sector, Dimian said that the World Bank granted Egypt EGP 200m to develop public hospital equipment and machines.
He added that the real challenge is changing the system for managing the national economy so that it is managed as one large entity and not separate units.