By Abdelrazek El-Shwekhy
Officials in the tourism industry criticised the government latest measures, which have been temporarily frozen, to raise taxes on selected goods.
Ahmed Balba, President of the B&G Hotels and Resorts, “We sent a memorandum to the president regarding recent tax hikes and appropriate fees to be charged to the nation’s tourism industry containing 33 specific points. We hoped to emphasise that now is not the time to impose new taxes on the sector.”
Elhami Al-Zayyat, head of the Union of the Egyptian Chambers of Tourism said “imposing new taxes on Egypt’s tourist industry without any indication of an increase in the number of tourists will increase the burden on private companies, and demonstrates that the government is not listening to experts in the industry.
The new laws raise taxes on beer by 200 per cent to 400 pounds per hectolitre, on wines by 150 per cent, sparkling water 25 per cent and non-alcoholic beer by 25 per cent.
Hisham Al-Shaar, Chairman for Blue Sky Travel Group that invests in hotels and tourism, stated that: “The tourist industry is on the brink of collapse,” He pointed to the fact that for the new taxes to be released only for them to be frozen hours later is proof of the state of confusion that the government has currently found itself in.
An official in the tourist industry who preferred to have his identity concealed, said that wine and spirits currently make up 20 per cent of the industry’s profits and that companies depend on their sale now more then ever considering the drop in the number of tourists.
He added that other sources of revenue, particularly food sales, consume large amounts of energy and man hours, and for that reason alcohol has come to occupy a larger portion of many companies’ profit margins.
Amr Sedky, member of the Board of Directors for the Chamber of Tourist Companies and Travel Agencies, stated that imposing new taxes on the industry without any simultaneous rise in the number of tourists will lead to a continued deterioration of the Egypt’s tourism sector, making it less competitive then their counterparts in the parts of the region.
He added, “the issue is not simply freezing or postponing the implementation of new taxes until hotels are able to strike new contracts and raise the price of their services, but rather an issue of being able to raise the quality of those services.”