A source at the Egyptian Tourism Federation (ETF) said that the federation will present a note to the Ministry of Finance to postpone the application of the value-added tax on tourism facilities for a period of one year—considering the current circumstances of the sector.
The source told Daily News Egypt that the sector is shackled by financial obligations, including dues to banks and the renovations facilities are conducting in preparation for the return of Russian tourists.
In the fourth quarter of the last year, the parliament passed the value-added tax on commodities and services at 13%—increasing to 14% in the coming fiscal year.
The inbound tourism movement in 2016 fell to 5.3m tourists, down from 9.3m in 2015, on the back of Russia and Britain halting their flights since the crash of a Metro Jet airliner at end of October 2015.
The source said that the ETF commissioned an accounting office to present the note this month, so that the ministry can study it and discuss its content afterwards.
He added that over the past four months, ETF representatives met with officials of the Ministry of Finance to explain the severe burdens faced by the sector, noting that they were understanding.
The head of the ETF, Karim Mohsen, said that July will witness increases in the fees of tourist visas, increasing from $25 to $60, along with higher archaeological site ticket prices starting from October to ease the burden on the sector.
Yet, the source said that posing fees on services when the sector is suffering from a recession will exacerbate the losses suffered by companies and hotels.
He added that President Abdel Fattah Al-Sisi called upon the government to strongly back hotels and the tourism sector during his meetings with tourism investors.