Red Sea Hotels Given 15 Days to Pay the 1% Guest-Bill Levy or Face Account Seizures

The Red Sea Governorate has given hotels, tourist villages and other tourist facilities across the province 15 days to settle unpaid dues from the 1% levy charged on guests' bills, warning that it will otherwise move to seize their bank accounts, according to Al-Masry Al-Youm, which says it obtained the notice.

The letters were addressed to the legal representative of each hotel establishment. The governorate says the charge rests on Articles 38 and 178 of the constitution as amended in 2014, on the Local Administration Law, and on Red Sea Governor's Decree No. 512 of 2009, which set a 1% fee on the bills of guests at hotels and tourist villages for the governorate's Local Services and Development Fund. That decree, it says, was issued with the approval of the local popular council and of the Cabinet, and it cites Cabinet instructions to collect the governorate's dues.

If the debt is not paid, or proof of payment produced, within 15 days, the governorate says it will begin forced collection under Law No. 308 of 1955 on administrative seizure — with no further warning or notice. The escalation it sets out runs:

• a request to the Central Bank to seize the hotel's or company's accounts at Egyptian banks;
• if those balances do not cover the debt, seizure of movable property owned by the hotel or company;
• and the governorate reserving its right to seize the establishment's real estate.

The governorate adds that it keeps all its legal rights to claim any other sums owed, and that the establishment bears the consequences of the collection process.

A levy already struck down in court

The charge itself is contested. Ibrahim Mohamed Ali, a lawyer at the Court of Cassation and the Supreme Administrative Court, told the paper that the Administrative Court in Qena has issued a ruling cancelling the prime minister's decision imposing a 1% local fee on the total bill of guests at hotels and tourist establishments for the local services and development funds, along with everything that follows from it.

The ruling, he said, turned on the constitutional principle that general taxes can only be created, amended or abolished by law, and that citizens and establishments cannot be charged taxes or fees except within the limits of the law. The court found that the Local Administration Law gives the governorate's local popular council, with Cabinet approval, the power to impose local fees — and that a local fee does not become legitimate merely because an administrative decision or a directive says so.

Guests at Red Sea hotels are the ones who pay the 1% on their bills, so how this is resolved reaches past the accounts departments. The report does not say how much is owed in total, how many properties received notices, or whether the governorate is appealing the Qena ruling.