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Explained: Decree Grants Tax Exemptions to People Impacted by February 6 Quake

21-03-2023/in Analysis & Features, HLP /by Rand Shamaa

More than a month after the February 06 earthquake, President Bashar Al-Assad issued a decree granting tax exemptions for people impacted by the disaster. Some of the measures listed in Legislative Decree No. 3 of 2023 are related to real estate that was partially or fully damaged in the earthquake, exempting owners from some current taxes and fees and temporarily from future taxes. The decree also eases the process for obtaining loans to restore damaged properties. 

At the same time, the decree did not include financial compensation to repair damaged properties, rental allowances for those who lost their homes, and promises of alternative housing. In short, the decree added nothing new regarding housing, land, and property rights for earthquake-affected communities, instead approaching the disaster from a technical and financial angle. 

In this sense, Decree No. 3 of 2023 is similar in content to the previous Decree No. 13 of 2022. The 2022 measure granted wide-reaching facilities and tax exemptions for properties in old city centres within Aleppo, Homs and Deir-ez-Zor governorates, including historic souks. 

Decree No. 3 of 2023 only extends to people impacted by the February 06 earthquake, and stresses that it does not apply to any other natural disasters. Furthermore, the decree’s scope is limited to the governorates most affected by the quake: Aleppo, Lattakia, Hama and Idlib. Beneficiaries include real estate owners or occupants whose facilities, shops, homes or buildings suffered full or partial collapse or were cracked and need reinforcement. 

For each earthquake-affected governorate, the Minister of Local Administration and Environment is tasked with forming a committee of “relevant entities” to identify the residents impacted by the February 06 disaster. Based on each committee’s findings, governors issue decisions officially identifying their governorate’s impacted residents. 

These identified residents will then be exempted from all taxes, financial fees, local fees and costs, service payments, permit fees and any additional costs imposed for partial or full reconstruction work or rehabilitation of facilities, shops, homes and buildings. In short, the decree granted exemptions for such payments – most importantly fees for reconstruction and rehabilitation permits – until the end of 2024. Anyone who wishes to conduct such work is no longer required to pay such fees during that time. 

Rehabilitation of a building means it can be repaired without the need for demolition or removal. On the other hand, reconstruction means that the building was damaged beyond rehabilitation and needs to be rebuilt or either fully or partially restored. 

The state imposes obligatory taxes on all citizens in order to secure treasury funds, without providing any direct services in exchange. Financial fees, on the other hand, are payments made to benefit the public treasury in exchange for certain services; these include real estate fees. Local fees and costs are those imposed by local councils in exchange for provision of services, such as sanitation. Only those who benefit from the relevant public services pay financial and local fees. 

Finally, service fees are those imposed by public entities or institutions for certain services, such as rubble removal, water and sewage networks. Additional or supplemental charges on service fees can be imposed during reconstruction or rehabilitation work in exchange for supervision from the Engineers Syndicate and employees of the Directorate of Cadastral Affairs’ Surveying Department. 

Article 2 of the decree exempts people impacted by the quake from paying real estate income and building plot taxes, which are annual taxes for real estate and other facilities of all categories, whether fully built or still under construction, and whether for residential, commercial or industrial purposes. In addition, Article 2 exempted earthquake-impacted property owners from the local fees and costs mentioned in Financial Law of Administrative Units No. 37 of 2021. 

Article 6 of the recent decree also cancelled the checking of paying for due taxes and fees prior to March 12, 2023, the date when the decree was issued. Next, Article 7 cancelled the checking of paying for due real estate and building plot income taxes in the earthquake-damaged areas. Cancelling these checking of paying for due taxes and fees means suspending as-yet-unpaid old requests for tax and fee payments on collapsing buildings. As a consequence, the decree suspended payments of some old taxes and fees incurred on damaged properties before its implementation date. 

According to Article 11, the exemptions only extend to people whose facilities, shops, homes or buildings suffered full or partial destruction or were cracked and need reinforcement. This means that safe, undamaged properties are not exempt, even if they are located in earthquake-damaged area, with the exception of real estate and construction plot taxes, which are suspended for all real estate in damaged areas according to Article 7. 

Paragraph B of Article 11 clarified that the tax exemptions and suspensions do not include real estate sales taxes that are subject to Law No. 15 of 2021. Consequently, this means that sales of real estate in earthquake-damaged zones remain subject to real estate sales taxes, though it is unclear why they are not exempt. 

The decree also stated that people impacted by the quake would be granted easements in paying off any loans incurred and obtaining new loans from public banks. Under Article 14, public banks may grant interest-free loans with a SYP200-million ceiling to people hoping to either partially or rebuild following the quake, or those hoping to rehabilitate their properties. 

According to the decree, the loan payback period is ten years, so long as the first payment is made within three years of the date the loan was granted. The state treasury bears any interest and commissions arising from granting the loans. 

https://hlp.syria-report.com/wp-content/uploads/2022/07/Logo-300x81.png 0 0 Rand Shamaa https://hlp.syria-report.com/wp-content/uploads/2022/07/Logo-300x81.png Rand Shamaa2023-03-21 19:22:042023-03-22 13:16:02Explained: Decree Grants Tax Exemptions to People Impacted by February 6 Quake

Souks in Homs to be Included in the Recent Tax Exemptions Decree

18-10-2022/in HLP, News /by Rand Shamaa

In August, Decree No. 13 of 2022 was issued, granting extensive tax concessions and exemptions within old city centres in the Aleppo, Homs, and Deir-ez-Zor governorates, including the historic souks. While waiting for the decree’s executive instructions to be published, however, government officials have given contradictory statements about the souks and districts in the city of Homs that the decree will cover. 

Homs is home to a historic market known as Souk Al-Masqouf, or the Covered Souk in English. Several other souks branch out from this one, some dating back to the Mamlouk era. The most important of these souks are the Al-Nouri Souk, the Textile Souk, the Perfumers’ Souk, the Silk Souk, the Goldsmiths’ Souk, the Distillers’ Souk, the Cloakmakers’ Souk, the Tailors’ Souk, Al-Hisbeh Souk, Al-Bazerbashi Souk, and the Womens’ Souk. Many of these souks specialise in certain goods, as their names indicate. There are around 1,000 total shops in Homs’ historic souks and some palaces and homes surrounding them.

The historic Souk Al-Masqouf, as well as its connected souks, are all part of the city’s Central Souk, the commercial centre of the Old City of Homs. There are some old popular markets within the Central Souk, such as Souk Al-Naoureh and Souk Al-Hamidiyeh. It is unclear whether Decree No. 13 will cover the entire Central Souk, or just Souk Al-Masqouf and the historic souks that branch off it. Recent official statements contradict one another over how the Old City, the Central Souk, the historic souks, and other commercial souks are distinguished.

In late August, the governor of Homs announced that preparations were underway to start tallying the shops in need of restoration within the city’s historic souk area. He added that lists of taxes and fees for specific crafts and professions, as well as for income taxes, debts, and consumer spending, are also being prepared. Decree No. 13 is to grant exemptions for those payments. 

The head of the Homs City Council has stated that the decree includes tax exemptions for destroyed shops and homes within the Old City that need restoration. The historic souk area, he added, contains 15 such souks, 390 of which have reopened. Some 600 shops have been restored, while 200 are ready to reopen and have yet to do so. 

Souk Al-Masqouf

Between 2000 and 2005, Japan funded restoration works for Souk Al-Masqouf in cooperation with the Homs governorate and Directorate of Antiquities. The work included repairing cracks in the walls and depressions in floors, reinforcing some building foundations, cleaning, and installing lights. 

But later, between 2012 and 2014, Souk Al-Masqouf became a frontline between regime and rebel forces in Homs’ Old City. Much of the area was damaged due to the fighting, in addition to regime missiles and artillery fire. Regime forces later forcibly displaced residents from all parts of Old Homs in 2014. The displacement soon led to widespread violations of the housing, land, and property rights in the old Homs and the Souk Al-Masqouf.

Afterwards, seemingly intentional fires broke out, damaging most of the shops in Souk Al-Masqouf, while looters seized anything they could dismantle and recycle, including metals and other debris, water piping, electrical wires, and phone lines. 

In 2015, a committee formed to undertake restoration and rehabilitation works in Souk Al-Masqouf. Representatives of the Homs governorate, the city council, the directorates of antiquities and museums, the Chamber of Commerce, and other government entities and offices served on the committee. There were also representatives from the city’s local community. 

Restoration work began in 2016 in Souk Al-Masqouf and some other smaller souks, with support from the UN Development Programme (UNDP) and Japan. 

The work was split into four stages, with the first three so far complete. 

The first stage lasted from 2016 to 2017 and included reopening the main roads in Souk Al-Masqouf and the other historic markets branching off of it. Rubble was also removed from these areas. 

Second, in 2017, rubble found in Souk Al-Masqouf was recycled according to charts and plans available at the Homs municipality and the directorates of antiquities and museums. Some 680 partially damaged shops were also restored, which included installing new floors and ceilings. 

The third phase, in 2019, aimed to rehabilitate infrastructure in the souk, including rehabilitating electrical, water, sewage, and landline networks; rebuilding the frameworks of destroyed shops; installing metal doors; and cleaning passageways. This phase also saw the installation of streetlights and power transformers throughout the souk. 

Finally, in February 2022, Syria requested that the UNDP fund the fourth stage of the rehabilitation project. This stage is meant to restore 179 shops in some of Souk Al-Masqouf’s side streets and the Goldsmiths’ Souk and the Tailors’ Souk. 

https://hlp.syria-report.com/wp-content/uploads/2022/07/Logo-300x81.png 0 0 Rand Shamaa https://hlp.syria-report.com/wp-content/uploads/2022/07/Logo-300x81.png Rand Shamaa2022-10-18 20:04:402022-10-18 20:47:08Souks in Homs to be Included in the Recent Tax Exemptions Decree

Read also

  • Online Briefing on the Impact of the Earthquake HLP Rights in Syria – March 22, 2023
  • Earthquake’s Impact on Housing, Land, and Property
  • Explained: Decree Grants Tax Exemptions to People Impacted by February 6 Quake
  • Post-earthquake Shelter Centres in Lattakia City
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