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First things should come first

Sun, August 19, 2018 09:14

By the Gazette Editorial Board

The government confused the public when it did not pave the way for the application of a property tax law, which had been shelved since it was ratified in 20l3.

So, real-estate owners found themselves required, overnight, to rush to real estate tax departments to enquire about their status, to see whether they should pay the  tax or they would be exempted according to what the law stipulates. And the government had been warning of a fine if the tax-payers failed to show up within the government's short-term notice.

Under the law, a unit whose market price is less than LE2,000,000 and which the owner uses as a residence,  is regarded tax-free. Yet, the government has been urging citizens to head to tax departments to fill in applications to state such ownership!

If owners across the country had responded to this appeal, tax departments would  never have been able to cope with the crowds that turned up.

The government had earlier started with coastal units to collect the due property tax retrospectively. The state indeed has the right to impose taxes on luxury summer resorts, but there is no logic in collecting the tax required for five years (from 20l3-20l8) all at once just because the government woke up to the fact that a forgotten law should be enforced.

As a result of the emerging confusion and the low tax proceeds collected, the minister of finance had to extend the deadline for two more months. Moreover, the cabinet has also agreed to amend the law so that the current estimate of the units' market price, which was supposed to be changed as of 20l9, would be applied for other two years.

This simply means that the government had not studied details of the law and the consequences of its application well before deciding to put it into effect.

The fact is that the government has no survey of the country's real estate wealth. And there have been many questions as to the means and mechanism of assessing the market price of millions of units throughout the country. The intended amendments will, therefore, address many defects that occurred after the application of the law in order to facilitate the process of tax collection and secure a fair taxation system.

The property tax law has raised controversy since it was first suggested during the Mubarak rule.  And the government should have known better than to take a hasty step in matters that have to do with putting an extra financial burden on  citizens, especially on the middle class strata, which are already suffering the punch of the high cost of living.

The government should work on creating an accurate database on the available property before asking for taxes.

The government confused the public when it did not pave the way for the application of a property tax law, which had been shelved since it was ratified in 20l3.

So, real-estate owners found themselves required, overnight, to rush to real estate tax departments to enquire about their status, to see whether they should pay the  tax or they would be exempted according to what the law stipulates. And the government had been warning of a fine if the tax-payers failed to show up within the government's short-term notice.

Under the law, a unit whose market price is less than LE2,000,000 and which the owner uses as a residence,  is regarded tax-free. Yet, the government has been urging citizens to head to tax departments to fill in applications to state such ownership!

If owners across the country had responded to this appeal, tax departments would  never have been able to cope with the crowds that turned up.

The government had earlier started with coastal units to collect the due property tax retrospectively. The state indeed has the right to impose taxes on luxury summer resorts, but there is no logic in collecting the tax required for five years (from 20l3-20l8) all at once just because the government woke up to the fact that a forgotten law should be enforced.

As a result of the emerging confusion and the low tax proceeds collected, the minister of finance had to extend the deadline for two more months. Moreover, the cabinet has also agreed to amend the law so that the current estimate of the units' market price, which was supposed to be changed as of 20l9, would be applied for other two years.

This simply means that the government had not studied details of the law and the consequences of its application well before deciding to put it into effect.

The fact is that the government has no survey of the country's real estate wealth. And there have been many questions as to the means and mechanism of assessing the market price of millions of units throughout the country. The intended amendments will, therefore, address many defects that occurred after the application of the law in order to facilitate the process of tax collection and secure a fair taxation system.

The property tax law has raised controversy since it was first suggested during the Mubarak rule.  And the government should have known better than to take a hasty step in matters that have to do with putting an extra financial burden on  citizens, especially on the middle class strata, which are already suffering the punch of the high cost of living.

The government should work on creating an accurate database on the available property before asking for taxes.

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