The Federation of Egyptian Banks (FEB) is preparing to submit a memorandum to Tarek Amer, Governor of the Central Bank of Egypt (CBE), calling for tax exemptions for banks holding foreclosed real estate properties, according to Daily News Egypt.
The memorandum asks Amer to address the new Minister of Finance, Amr El Garhy, and ask for an exemption for lenders. The banks had previously requested the former Minister of Finance, Hany Qadry, to reconsider applying taxes, but the appeal was rejected, said Adnan El Sharqawi, Deputy Chairman of the Egyptian Arab Land Bank (EALB), reported Al Mal.
According to El Sharqawi, applying taxes on banking institutions will be difficult to implement. State-owned banks and EALB will be the most affected due to their ownership of high-value property assets.
There have been several meetings held between CBE and FEB with the representatives from the Ministry of Finance, but the dispute is yet to be resolved.
“Banks are to pay real estate tax of 5 percent on all its’ real estate assets, including its headquarters, without objection on this matter,” El Sharqawi said, as reported by Daily News.
Property obtained via defaulting customers does not generate any income for banks, and banks refuse to pay taxes on these properties, added El-Sharqawi.
Banks have put forward several proposals to resolve the problem at hand. One of them includes granting banks a five-year tax exemption on real estate obtained as settlement of non-performing debts.