The Secretary of State to the Minister in Egypt (Howell)

No. 141

Sir: The Department has received your despatch No. 415 dated November 3, 1923, with reference to the “Gaffir Tax” which the Egyptian Government appears to be desirous of collecting from foreigners in Egypt. …

While under the Real Estate Protocol of 1874 between the United States and the Ottoman Empire,1a American citizens may be required to pay taxes levied upon real property, owned by them, under the reserve of the immunities attached to their persons and their movable goods according to the Treaties (Article II), it does not appear that the tax here in question is properly to be considered a real property tax. On the contrary it is understood to be in addition to such tax, and is assessed against the occupants of property without regard to the ownership thereof.

This Government has not given its consent to the collection of taxes of this kind from American citizens, and it does not appear that the tax has been assented to by other Capitulatory Powers, or that it can be justified under the real estate protocol of 1874. In so far as regards American citizens it is not perceived that the law can have any application. …

It has not been the practice of this Government to withhold assent to the collection of taxes from its nationals and ressortissants in countries where it enjoys capitulatory privileges when such assent is requested and it is shown that the taxes are intended for the benefit of the community as a whole, and are reasonable in amount and apply alike to all nationals. The assent of this Government does not appear to have been requested in this case nor has there been any showing that the tax and the method of assessment are reasonable, or that it is imposed for the benefit of the community at large. Under these circumstances and in view of the fact that other capitulatory powers in Egypt have not given their assent to the collection of the tax from their nationals, the Department cannot admit the application of it to American nationals.

Should occasion arise you may inform the Egyptian Government of this Government’s views on the subject.

The Department will be pleased to receive for possible future use a copy of the law.

I am [etc.]

For the Secretary of State:
Leland Harrison
  1. Malloy, Treaties, 1776–1909, vol. ii, p. 1344.