The initiative only applies to hotels operating in Greater Cairo, Luxor, Aswan, the Red Sea, South Sinai, and the North Coast
The Egyptian Cabinet reviewed a proposed incentive package to encourage the tourism sector to invest in increasing the number of hotel rooms.
The cabinet approved a new EGP 50 billion tourism initiative in which the government will offer financial incentives to encourage companies working in the sector to increase their hotel room capacity.
The initiative only applies to hotels operating in Greater Cairo, Luxor, Aswan, the Red Sea, South Sinai, and the North Coast.
It was emphasized during the meeting that the return on investment in creating new hotel rooms would support the national economy, as every 15,000 hotel rooms contribute to achieving a value-added tax estimated at approximately EGP 1 to 2 billion, and about EGP 2 billion in commercial tax and industrial profits. This is in addition to providing about 45,000 new direct and indirect job opportunities.
It was also noted that the incentives offered in this regard would contribute to increasing the state’s foreign currency resources, in addition to contributing to reducing unemployment rates, as a direct result of stimulating the private sector to develop its investments.
A number of conditions were also reviewed for companies eligible to these incentives, companies will need to exchange 40% of their hard currency revenues through the banking system for a five-year period.
The mechanisms for the initiative will also be developed in coordination between the Ministry of Finance, the Central Bank of Egypt, and the Ministry of Tourism and Antiquities.
