The Egyptian Hotels Association sent a memo about the measures upon which the real estate tax is calculated on hotels to Minister of Tourism Hisham Zaazou to submit it to the Ministry of Finance.

An official in the Egyptian Hotels Association said the Ministry of Tourism is still negotiating with the Ministry of Finance about using the Substitution Way, upon which the tax is calculated.

The Substitution Way stipulates calculating the tax in accordance with the ratio of the buildings to lands they are established on, excluding the entertainment facilities out of the calculation and taking into consideration the spaces between the buildings, not on the entire space of the project.

The Market Value Way of calculation stipulates on calculating the value of land and all of its facilities. Tourism workers in the field reject using the market value as a measure for calculating the tax but the Ministry of Finance is sticking to it.

The official said it is necessary the Ministry of Finance takes into consideration the difficult circumstances the tourism sector goes through in the current period, not to add more burdens it.

“Over five years, the tourism is registering losses and there are hundreds of hotels suspended their work. Unless the state supports the rest of the hotels, they will do the same,” he said.

Chairman of the Egyptian Tourism Federation Elhamy El-Zayat believes the real estate tax imposed in the historical hotels in Cairo will increase with rates not less than 200% in case it is calculated upon the market value.

Tourism is going through very difficult circumstances since the Russian and British trips were suspended because of the Russian plane crash on 31 October 2015 and it requires the support by all state bodies not to add more burdens on it.