Strong Construction Sector Leads Egypt to Increase Taxes on Cement and Iron

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Researched by Industrial Info Resources (Sugar Land, Texas)--Egypt's Minister of Housing and Urban Utilities Ahmed El-Maghrabi recently announced that real estate investment and the construction sector achieved annual growth rates of about 15% in the past two years. The Egyptian government has taken measures to increase the prices of iron and cement to increase government revenues.

Sales tax on cement will increase 5%, while sales tax on iron will increase 8%. This will bring the government additional revenues of approximately $1.23 billion.

For energy-intensive industries, such as iron and copper production and the manufacturing of cement, aluminum and fertilizer, the Egyptian government will continue to use the current price of gas, which is $3 per million British thermal units (Btu). For electricity at these plants, dual tariff rates will be applied. A 50% increase in the price of electricity will be added at peak times, which will be determined by the Ministry of Electricity for the summer and winter.

Dr. Mahmoud Mohi Eddin, Egypt's minister of investment, said that the production of cement in Egypt amounted to 50 million tons this year, compared to 31 million tons in 2004. Next year, cement production is expected to be up to 60 million tons to meet the local demand and provide surplus for export.

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