A few months ago, Mustafa Hilal was shocked when his neighbor was stopped at a police checkpoint and arrested due to an in absentia sentence of one year in prison for a breach of trust case he knew nothing about. He discovered that the non-payment of improvement fees demanded by Giza Governorate was the cause of the case.
Hilal turned to his lawyer and discovered that the same judgment had been issued against him. He hired the lawyer to appeal the ruling and pay his share of the improvement fees for his apartment, which amounted to around 3,000 EGP, plus the fees for his vacant plot of land, which were 20,000 EGP. However, to his dismay, the judge did not understand and upheld the ruling because he had not paid the full building fees of 36,000 EGP.
Mustafa Hilal, a merchant and property owner in the Omrania district of Giza Governorate, told Zawia3, “I had to attend the appeal hearing, and the police handcuffed me. They detained me all day, and many others were held for similar breach of trust cases. It ended with a court ruling to release me, and I incurred lawyer fees in addition to the charges.”
He explains, “The governorate had sent notices to property and apartment owners along Tersa Street, even those 150 meters away from the street, requiring me to pay 20,000 EGP as improvement fees for the small remaining plot of my building that was demolished for street widening, in addition to 36,000 EGP as improvement fees for the sold property where I only own the apartment I live in.”
This comes as part of the improvement of building facades in Egypt and the visual identity project adopted by the authorities in 2018. President Abdel Fattah El-Sisi adopted the project proposed by two students from the German University in Cairo (GUC) at the sixth youth conference held at Cairo University in the same year. GUC students had already started implementing the project in 2016, aiming to improve the general appearance of Egypt’s streets by preparing and selecting designs suitable for each governorate, highlighting their tourist landmarks, crafts, and industries.
“Atef Ahmed, who lives with his family in an apartment in a large residential building overlooking Tersa Street in the Haram district of Giza Governorate, was shocked along with his neighbors by notices sent by the Giza Governorate to the property owner, demanding improvement fees of around 300,000 EGP. They were threatened with property seizure if they failed to pay.
The engineer responsible for the improvement, sent by the governorate, told us they send three notices to the residents before filing a lawsuit and administratively seizing the apartments, possibly selling the furniture to cover the debt. She told us the apartment value increased after the improvement, development of the street, bridges, and asphalt, as if she shared ownership of the apartment! I had to pay 4,000 EGP for my apartment, as did my neighbors, fearing the lawsuit,” says Atef.
Old Law Not Implemented
The improvement fees crisis dates back to a decision by Giza Governor Ahmed Rashid, published in the official gazette on December 18, 2019, imposing improvement fees on properties and vacant lands in the area surrounding Al-Orouba Street from Osman Moharram Street to Mariotia, a length of 3.1 kilometers, and Ezz El-Din Omar from Al-Orouba to Al-Haram Street, a length of 1.1 kilometers and a depth of 150 meters on both sides of the street. The area surrounding Tersa Street from the east of Al-Zomor Canal to the west of Mariotia Canal, a length of 6,150 meters and a depth of 150 meters on both sides of the street.
In the past two years, the government started implementing an old law that was not previously enforced, imposing taxes on properties near public urban development projects, up to 150 meters away. This is Law No. 222 of 1955 regarding imposing improvement fees on properties that benefit from public utility projects, arguing that the projects increase the value of adjacent properties and that the government is entitled to half of the resulting increase.
According to Mahmoud Ahmed Abdel Aziz, Professor of Structural Engineering at Tanta University and Chairman of the Practice Committee at the Western Engineers Syndicate, the government aims to finance development and infrastructure projects, enhancing services like water, sanitation, electricity, and roads through improvement fees. However, this has sparked controversy, with some viewing it as an additional tax burden on citizens already under economic pressure. He commented on the government’s method of collecting these fees as a hindrance during licensing procedures.
Abdel Aziz explains to us that the government should consider citizens’ ability to bear these fees and not impose additional burdens on them, ensuring that the projects funded by these fees benefit citizens and become part of a broader sustainable development strategy.
Improving Visual Identity
Meanwhile, Emad Jaafar, who lives in the Dokki district in northern Giza Governorate, was surprised when a district official and a contractor came to his residential building and informed the caretaker that the governorate was demanding residents to pay 64,000 EGP for renewing the building’s facade.
Emad says he and many residents refused to pay the amount, but shop owners had to pay to contribute to painting their building’s facades and adjacent residential buildings, fearing conflicts with district officials that could harm their businesses. He accuses some district engineers of colluding with contractors to inflate cost estimates to extract money from residents.
Egypt’s governorates are implementing President Abdel Fattah El-Sisi’s 2019 directives for unified facade painting of all buildings instead of red bricks, with a deadline for completing the four facades, or legal action will be taken.
Local newspapers reported that a Giza Governorate official instructed district, center, and city heads not to provide utilities to newly built or under-construction buildings whose owners refuse to paint their facades, according to the Unified Building Law No. 119 of 2008.
Meanwhile, the National Organization for Urban Harmony continues to implement renovation and renewal projects, most notably improving the visual identity along the ring road and roads leading to the Grand Egyptian Museum in preparation for its opening.
Sayed El-Din Farag, Professor of Urban Planning, believes that improving and developing the roads around the Grand Egyptian Museum and the Pyramids Plateau, and constructing new bridges are part of the visual identity project. The urban development strategy relies on basic infrastructure such as roads, bridges, and utilities like water, electricity, and sanitation, alongside public transportation lines such as new metro lines and bus rapid transit, creating a visual sequence for Egypt and reshaping the mental image for visual enjoyment. He cites painting the facades of Tahrir Square buildings, developing Al-Muizz Street, and currently painting residential buildings overlooking the ring road.
Farag believes property owners should share the costs of painting facades, as it increases their market value, fostering a sense of ownership and maintenance. Painting operations are supervised by a committee from the Urban Harmony Organization, including professors from the Faculties of Fine Arts and Applied Arts.
No Fees Without Law
Prominent human rights lawyer and director of the Lawyers Network at the Egyptian Center for Economic and Social Rights, Malik Adly, explains that there is a principle stating that no tax or fee is imposed without a law. Thus, any money collected from citizens without a law approved by the Parliament to cover budget deficits and develop governorate resources is unconstitutional and can be described as “extortion.” He highlights that imposing fees without laws has become a practice in many government institutions, not just governorates, noting that the Egyptian Center has obtained rulings invalidating fees collected by judicial authorities from citizens without laws.
Adly points out that when the state imposes fees or has unpaid dues from citizens, it takes several steps, including administrative seizure of citizens’ properties, appointing a custodian, and filing a breach of trust lawsuit that turns into a misdemeanor in the law, resulting in a prison sentence for the accused. He argues that the source of debt in improvement fees is illegal, citing the withdrawal of Gharbia Governor’s decision to impose these fees as evidence of their illegality.
In December 2021, the Gharbia Governor withdrew his decision to impose improvement fees on properties following a request from MP Ahmed Bilal Barlasi, who explained that he received a complaint from a citizen unable to pay the 25,000 EGP improvement fees for renovating her house.
Adel Amer, director of the Egyptians Center for Political, Legal, Economic, and Social Studies, confirms that no administrative decision can impose fees without a law issued by the Parliament specifying the subject groups, which the Supreme Constitutional Court reviews for constitutionality. He adds that infrastructure maintenance and improvement are constitutional rights for citizens, funded primarily by the state’s general budget and taxpayers’ money. He notes that breach of trust cases due to fees should ensure that warnings were given, then a committee with judicial authority performed administrative seizure on the property, and the owner was appointed as custodian.
Amer explains that charging property owners for painting facades is subject to the Local Administration Law, which gives the governorate the right to impose service improvement fees, typically decided by local councils. Due to their absence, the Governors’ Council does so, ratified by the Cabinet.
Tax Burden Overload
According to the monthly report of the Ministry of Finance, Egypt’s tax revenue increased to approximately 405.6 billion EGP during July to October of the 2023/2024 fiscal year, a rise of 111.4 billion EGP, a 37.9% growth. Tax revenues contributed 85.6% of the total state budget revenues, which rose to 474 billion EGP during the same period, a 31.4% increase compared to the previous year.
Amer sees these fees as an additional burden draining the limited financial resources of citizens already under economic pressure due to political promises. He notes that taxes represent nearly 75% of the general budget, a very high percentage, ideally relying more on production, causing economic imbalance and forcing the government to borrow.
Economist Ahmed Shoukry, a member of the Egyptian Association for Political Economy, Statistics, and Legislation, explains that the multiple types of taxes, including property taxes, weigh heavily on the tax base. Fees differ from taxes, the main source of public budget expenditure in Egypt, and should be tied to direct services provided in return for the fee.
While many apartment owners have paid the fees demanded by local authorities, many others have struggled and face potential imprisonment, bearing financial burdens like other middle and lower-income Egyptians amid the worsening economic crisis. This necessitates government reconsideration of any burdens citizens may bear due to the urban development bill and improving the visual identity.
