Anger over property tax may force Egyptian government to back down

Not paying the new tax could deprive property owners of the right to sell their home or connect it to the water, electricity or gas grids.
Monday 01/03/2021
A view of housing at Ramlet Boulaq district in Cairo, Egypt. (REUTERS)
A view of housing at Ramlet Boulaq district in Cairo, Egypt. (REUTERS)

CAIRO - Protests on social media by Egyptians rejecting a new legislative amendment to the real estate registration and notary authority’s law reflected significant anger at the government’s policies in light of Cairo’s insistence on imposing taxes and onerous procedures to register their real estate properties, especially as 92% percent of Egyptian buildings are not officially registered.

The government intends to implement the new amendments to the real estate registry law starting on March 6.

After that deadline, unregistered property owners will be deprived of the right to sell, bequeath or connect their properties to the water, electricity or gas grids. They will not be able to obtain official papers for themselves and their children or obtain bank loans or government services before registering and paying the financial dues.

The new measures shocked the public, as each step requires financial payments that are determined according to the area of the building and its market value.

The lowest amount that would be paid by each family exceeds an average government employee’s minimum wage, which is $127 a month. More than 35% of Egyptians live below the poverty line, with an average income of about $55 a month, according to an official statement issued by the Central Agency for Public Mobilisation and Statistics.

The government justified its insistence on implementing the new amendments by saying its intent is to safeguard real estate assets, enhance their market value and prevent the purchase or sale of properties by dishonest individuals.

The government has so far ignored the anger of those rejecting the law, believing that the outcry will not go beyond electronic protests or café gossip, as was the case each time prices were raised or taxes spiked.

This time, however, it seems anger will not subside quickly, because the pandemic has compounded the suffering of people and  increased the level of poverty, joblessness and destitution.

Anger might in fact flare up, forcing the government to retreat or further amend the law, as happened with a previous construction law.

Many Egyptians have grown convinced that their silence over the government’s taxation initiatives will only bring them more financial burdens.

They believe  it is time to stand up to these measures so that the government wakes up and realises that the population will not acquiesce forever to footing the bill alone for the cost of economic reform.

Karim Al-Omdah, a specialist in political economy, said, “The financial resources that need to be collected from each property owner are exaggerated. Also, exempting rural residents from the tax to appease the low-income people will not make overcoming the crisis any easier.”

Omdah told the Arab Weekly, “It is common knowledge that paying the tax is in return for services that citizens receive. The state has the right in real estate dues that must be collected, but that should be done in a way that does not cause people to be anguished or make them feel that it restoring the economy at their personal expence. ”

Mohamed Sami, former head of the opposition Karama party, said, “All evidence indicates an anticipated intervention by President Abdel Fattah Al-Sisi to halt the implementation of this law, because he will not risk antagonising the majority through such a step.”

Sami told The Arab Weekly that “the government’s real crisis lies in its interpretation of the patience and resilience of Egyptians as indirect expression of support for its policies, believing the common man in the street will not accept chaos, but that will not last forever.”

The crisis revealed the dangers inherent in a political vacuum and the absence of political forces than can carry influence. Political parties have remained silent and most parliament members have declined to take responsibility for the law, claiming it was ratified by the former parliament. These attitudes have compelled the population to play the role of the opposition. which is nowhere to be found.