New Tax Hits Egyptian Food Cart Owners Struggling to Make Ends Meet
The Egyptian Local Management Committee has decided that a food vending permit would cost the maximum of 20,000 pounds (EGP), or $1,135, and allow vendors to operate in public spaces during a one-year period.
CAIRO – After turning to food vending to sustain their families, many Egyptians found themselves in a difficult situation after authorities approved in April a new tax on street food trucks and carts.
The new tax has long been a subject of discussion for the Local Management Committee. It has finally decided that the permit would cost the maximum of 20,000 pounds (EGP), or $1,135$, and allow vendors to operate in public spaces during a one-year period.
“The decision is final and will be applied in coordination with the localities,” Ali Etman, a member of the Local Management Committee told The Globe Post.
The aim was to protect consumers from any potentially hazardous foods, Etman added, clarifying that food carts would have fixed locations to keep roads aesthetic and in good shape.
According to the law, the cost of the permit depends on the location. Therefore, the law requires food truck owners to install GPS trackers. Permits get usually issued within 15 days of the receipt of the request, and cannot be relinquished to others without prior notification.
In the draft version of the bill presented to the House of Representatives, the government suggested the maximum tax of 10,000 EGP ($567) for every six months, but the lawmakers adjusted it before ratification.
During discussions, a representative of the Interior Ministry at the committee stipulated that food carts would have to meet safety requirements to be able to obtain a license. Meanwhile, Health Ministry representative Maysa Hamza was concerned over health-related issues. According to her, such food carts demonstrate inadequate food safety practices like poor hygiene and lack of sanitation. That’s why she urged caution in issuing any license.
Split over the Law
The increase of the permit’s cost from 10,000 EGP ($567) to 20,000 EGP ($1,135) caused a split in the House. The pro-increase representatives justified the move by saying there were some food carts making big money from selling highly priced food at high-end places. At the same time, other representatives warned against imposing unfair fees on food trucks catering to low-income neighborhoods.
“The government wants to merge the unofficial economy represented in the food vending business into the official economy,” Wael el-Nahas, an economic expert, told to The Globe Post.
In return, the government intends to subsidize these carts owners by selling groceries to them at good prices without oscillation, el-Nahas added.
Rashad Abdo, the head of the Egyptian Forum for Political and Economic Studies, told The Globe Post that permits will help owners of food carts to work legally without interferences and corrupt practices in some localities.
El-Nahas clarified, however, that the state did not need a new law but rather required a new system.
“The laws sometimes create corruption, and the laws magnify corruption,” he noted.
Rise of Food Vending Business
The food truck businesses have been widely growing across the country. However, there are no exact figures estimating the number of the food carts or the volume of profits. Meanwhile, such small businesses are booming amongst youth and became their outlet for dealing with the unemployment issue.
Egypt’s unemployment rate dropped to 11.3 percent in the fourth quarter of 2017, compared to 12.4 percent in the same period of 2016, according to the February 15 report by the Central Agency for Public Mobilization and Statistics (CAPMAS).
Foul (fava beans) and falafel carts are common in Egypt and usually operate in the mornings near government buildings and other locations with heavy traffic. As these traditional carts have grown in popularity, other cart owners have come up with new designs and ideas to sell different types of ready-made food.
Khaled, a 24-year-old commerce graduate, is now running a small food business. He sets up his stand in front of an educational institution in Nasr City, east of Cairo.
“I know nothing about the new permit; I am just working here to boost my income,” he told The Globe Post.
Khaled uses his cousin’s small car as a mobile food unit. His menu, written on a small blackboard, doesn’t offer a lot of choices. He offers only two items, grilled meatball sandwiches and the Arabian tea made on charcoal.
Khaled said his project generates a net profit of 400 EGP ($22) a day, which is sufficient for him.
“I do not work all day long, just four hours. I target the institution’s students, and when I finish, I go to my second job at an air conditioning company close to my business,” he said.
Khaled admitted that he works without getting any permits or health certificates, just like many other vendors.
“However, no one complained about my sandwiches before, my food is delicious and clean,” he noted.