Egypt announces tax hikes, hits alcohol and tobacco hardest

As part of Egypt’s agreement for a $4.8 billion loan with the International Monetary Fund (IMF) the country was forced to implement a series of tax hikes. Surprising most everyone in the country on Sunday, less than a week ahead of a constitutional referendum, the government announced a series of tax hikes across the board, from alcohol and tobacco to gas and real estate.

The move is unlikely to sit well with protesters continuing to march against President Mohamed Morsi, but are part of agreed upon obligations that came with the IMF loan agreement.

When a group of waiters at a local cafe in Cairo heard the news, they told Bikyamasr.com frankly, “Morsi is going to kill us.”

“We are a poor people, why do this to us?” asked Hamdy, 32.

According to the new taxes, some of the increases are as follows:

Cigarettes: 50 percent hike on selling price to consumers in addition to a 250 Egyptian pound rise in packaging for imported cigarettes.
Beer: 200 percent increase, with a minimum of 400 pounds on liters.
Alcohol: 150 percent rise on beverages with a minimum of 15 pounds on the liter.
Tobacco: 150 percent tax on local importer.
Carbonated water: 25 percent
Advertising: 10 percent tax on all advertising, 15 percent on the declaration of one million pounds and a 25 percent tax on ads more than 25 million pounds.
Ads pertaining to a “public service” are exempt from this tax, including warning ads, job advertisements and missing persons ads.
Nightclubs, cinemas, restaurants and other establishments will be be taxed a percent of their value, the government statement said.
Butcher shops will have a 100 pound tax annually.
All permits will be charged a tax going forward.
Electricity: 3 piasters per every kilowatt of electricity used.
Gas: 6 piasters on every cubic meter of gas consumption in non-industrial purposes.
Gas for industrial use: 25 piaster increase on the cubic meter; three pounds per ton of gas consumption and butane gas.
Real Estate: 10 percent of the annual rental value of the property, after excluding 30 percent of the value for housing purposes and 32 percent for non-housing purposes.
Owners of flats that have a rental value of less than 24,000 pounds annually can exempt one location from the tax.
Stock market and capital gains will also see a 10 percent tax.