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Finance ministry yet to impose property tax on petroleum companies: Adviser - Daily News Egypt

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Finance ministry yet to impose property tax on petroleum companies: Adviser

Public petroleum establishments will be exempted, while private companies will be subject to the law, says senior Tax Authority official


An anonymous senior official at the Tax Authority said that the property law will likely provide exemptions for public petroleum company premises and fields but will be applied on private ones. (AFP Photo)
An anonymous senior official at the Tax Authority said that the property law will likely provide exemptions for public petroleum company premises and fields but will be applied on private ones.
(AFP Photo)

Finance Minister Hany Kadry Dimian has yet to decide on enforcing the property tax on petroleum establishments and oil fields, ministerial media adviser Ibtesam Saad told Daily News Egypt Sunday.

Following the 96/2008 Property Tax Law amendments decreed by President Abdel Fattah Al-Sisi last week, a finance ministry official disclosed that oil fields are subjected to the law.

An anonymous senior official at the Tax Authority said that the law will likely provide exemptions for public petroleum company premises and fields. However, if they are private, “it will be treated like any other private property”, the official said.

The official stressed that the property tax law is applied on all properties except for the already-announced exemptions.

In the same regard, Dimian met Sunday with ministers of petroleum, tourism, transportation and civil aviation to discuss the standards of applying the property tax on the buildings affiliated to these ministries.

A Sunday statement from Ministry of Finance stated that the Tax Authority has already started sending notifications to residential units that has been surveyed and evaluated, adding that evaluating airports and industrial establishments has been made.

The amended law mentioned that hotels, clubs, hospitals, medical centres and clinics affiliated to the armed forces are exempted from paying taxes. Hospitals, educational institutions and non-profit charities are also exempted from paying taxes, but tourist resorts and hotels are subject to the law.

Al-Sisi also modified the tax-exempt tranche to include those owning EGP 2m in a single residential unit. The original law had exempted only those owning a total of EGP 2m in residential properties.

Properties subject to the law will pay 10% of the rental value each year. The property tax law was amended in November 2013 to expand the tax-exempt tranche to include industrial and commercial units along with the normal residential tranche. Those owning EGP 100,000 in commercial and industrial units were exempted from paying taxes.

According to the law, residential properties with annual rental values less than EGP 24,000 will be exempted from paying taxes, alongside commercial units with annual rental values under EGP 1,200.

Mohamed Al-Sokkari, former deputy head of the Egyptian Petroleum Research Institute, said that petroleum companies would remain unharmed, “because the requested values are too few”.

The property tax, which is expected to collect over EGP 3bn after the first year of implementation, came into effect in January 2014. The taxes will be collected at the beginning of each calendar year rather than the fiscal year, which begins in July.

https://www.dailynewsegypt.com/2014/08/25/finance-ministry-yet-impose-property-tax-petroleum-companies-adviser/
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