In an exclusive interview with MEO, Samir Aref, Chairman of 10th of Ramadan Investors Association, uncovers a number of burdens to investment in 10th of Ramadan City. One of the main burdens is imposing a real estate tax on the factories’ buildings. Furthermore, there is a number of factories that have shut down, ranging from 150-200 factories whereas 50 percent of the city’s factories operate with less than their full capacity. Moreover, Aref urges the government to offer incentives in order to encourage investors; incentives such as reducing industrial loans’ interest to 9 percent and offering lands under usufructuary rights and not industrial developer system.
What are the burdens to investment in 10th of Ramadan City?
Imposing a real estate tax on the factories’ buildings is among the burdens to investment. Usually, investors pay profits tax but a factory’s building should not be included in this tax. It does not achieve any profits like other real estates which are sold or rented for the purpose of profits.
Can you tell me about workers’ social and medical insurance?
Well, social and medical insurance are other burdens facing investors; medical insurance does not fully cover workers which force investors to pay for private insurance services. Insurances seize 40 percent of workers’ salaries, divided as 26 percent of employer’s budget and 14 percent of worker’s salary. Furthermore, workers are given low pensions and treated in low quality hospitals.
How do you view the procedures taken by the government towards investors?
The government has been taken procedures towards investors that could force them to lay off workers and use machines instead.
What are the consequences of increasing interest rates of industrial loans?
Increasing interest rates of industrial loans might force investors to leave the local market and invest in other countries.
How many factories are in 10th of Ramadan City?
There are 3 thousand factories in 10th of Ramadan City whereas 150 to 200 factories have shut down. Furthermore, 50 percent of the factories operate with less than their full capacity.
Why did these factories shut down? Is it because of the current economic situation?
Factories’ shutdowns were not caused by the economic situation but due to employers’ failures and the lack of adequate economic feasibility studies.
How can we revive industry and investment?
I believe we can revive them if the government starts offering investors lands under usufructuary rights system for 50 or 60 years. As a result, investors will not incur costs of purchasing lands and the government will be able to keep its ownership of lands.
How do you view offering lands under the “industrial developer” system?
I believe that the “industrial developer” system is going to incur investors more costs because developers aim at gaining profits which means that developers will sell lands to investors at high costs. Furthermore, investors are supposed to be concerned with their capitals, equipment purchase, machines and production materials; instead, the government compels them to think of how they are going to afford buying the lands.
Consequently, the majority of investors tend to invest in the real estate sector because it offers high profits and maintains their capitals.
How effective is the Supreme Council of Investment?
The recent established Supreme Council of Investment, headed by President El-Sisi, could only support investors if it would include experienced members who are well-aware of investors’ burdens in the local market.
