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Religious, economic experts weigh in on property tax law - Daily News Egypt

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Religious, economic experts weigh in on property tax law

CAIRO: Religious and economic experts alike criticized Al-Azhar and the Islamic Research Center for saying that the new property tax law is against Sharia. Earlier this week, members of Al-Azhar as well as the Islamic Research Center said that the controversial property tax law violates Sharia, and called on Finance Minister Youssef Boutros-Ghali to rescind …


CAIRO: Religious and economic experts alike criticized Al-Azhar and the Islamic Research Center for saying that the new property tax law is against Sharia.

Earlier this week, members of Al-Azhar as well as the Islamic Research Center said that the controversial property tax law violates Sharia, and called on Finance Minister Youssef Boutros-Ghali to rescind it, Al-Masry Al-Youm reported.

Emad Ghoneim, economic analyst at Al-Ahram newspaper, who himself opposes the law and says it is unconstitutional, said that religion should not be brought into this matter.

“[Al-Azhar’s] reasoning was not clear or convincing, he said.

Ghoneim, however, said that Al-Azhar is not the only entity opposed to the law, explaining that President Hosni Mubarak has not yet given a final word regarding this law in response to the public’s concern.

In mid-January, President Mubarak said that the property tax law is not final, and that he is “thinking of ways to make its implementation gradual.

Finance Minister Youssef Boutros Ghali, clarified, stating that the law would not undergo amendments, and that the current considerations pertain merely to the pace of its implementation.

Sheikh Saber Taalab, former member of the Islamic Research Center, said that while the law does not violate Sharia, it should not be applied to everyone.

“If collecting taxes from the rich to give to the poor is the purpose of the law then I cannot oppose it, he said.

He explained that this tax can be considered zakat for those who can afford it. He added that since those who are not financially able are exempt from zakat, they should be exempt from paying the tax as well, indicating that it might pose a financial burden.

Ihab El-Desouky, economics professor at Al-Sadat Academy, said “Taxes are paid for properties that generate income, explaining that apartments or houses that are used as clinics or offices should also be taxed.

He added, however, that residential properties do not generate income and should therefore be exempt from taxes.

“If you own a house you lease [therefore generating income], then this new property tax law should apply to you, El-Desouky said.

However, Hussein Shehata, professor of Islamic economics at Al-Azhar, supported Al-Azhar’s stance.

While he also considered the tax a form of zakat, he said that “no one should pay zakat for their residential properties, because shelter is one of the basic human needs.

He added that according to Sharia, the government is responsible for providing shelter for the underprivileged, not charge those who have shelter. He described the law as “unfair [and] un-Islamic.

The new property tax law was expected to come into effect by January 2010. However, the controversy shrouding it led to the delay.

When the implementation of the law was stalled, Reham ElDesoki, senior economist at Beltone Financial, said the president’s comments may have resulted from extensive media coverage and protests by members of parliament.

She explained that some critics demand that each taxpayer be permitted to exempt their place of residence from the tax. Businesses, on the other hand, have declared that Egypt’s economic conditions are still too volatile, following the global economic crisis, and that the tax should not be levied until greater economic stability has returned.

The main public concern is that the law will pose a financial burden even though 90 percent of the population will be exempt as their residential properties value less than LE 450, 000.

The law, as proposed by the Ministry of Finance, stipulates that homes worth less than LE 450,000 are exempt while those worth LE 1 million will be charged LE 660 a year.

The Ministry of Finance was unavailable for comment.

Topics: Aboul Fotouh

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https://www.dailynewsegypt.com/2010/01/28/religious-economic-experts-weigh-in-on-property-tax-law/
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