883.512 Motor Vehicles/23
Memorandum by the Minister in Egypt (Jardine)51
I called on the Minister for Foreign Affairs this morning at his request.
He brought up the question of increased taxation on automobiles, stating that the Egyptian Government was spending L.E. 500,000 on the maintenance of roads alone, and an additional L.E. 450,000 on the construction of new roads. Present taxation on automobiles brought in only L.E. 200,000, consequently the Government had been forced to draw on its general funds. The Government thought it reasonable that automobiles should pay their way more than they had in the past since they caused by far the greatest amount of wear and tear to the highways. The Government, however, was making a very modest request. It asked only for taxes which would cover road maintenance and was leaving the question of providing for new roads outside the scope of the proposed taxes.
In reply, I referred to the two notes which I had sent him regarding the restrictions on motor traffic which had been put into effect, and said that while I was disposed to give favorable consideration to new taxes, I was hardly in a position to do so before the question of the restrictions should be settled.
Yehia Pasha replied that the question of the restrictions was an entirely separate matter, and that each question should be settled on its own merits. My notes concerning the restrictions were being [Page 648] considered by the Ministry of Communications, and in this matter he was merely serving as an intermediary between me and the Minister of Communications.
I said that nothing would please me more than to be able to consider the taxation proposals on their own merits. In all fairness, the Egyptian Government should be in a position to tax automobiles to the same extent that they are being taxed in Europe. The Egyptian Government was making assent to new taxes difficult, however, by the arbitrary restrictions on motor traffic. These restrictions were illegal and confused; it was impossible to find out exactly what they were because they did not appear in the Journal Officiel and they were constantly changing.
Yehia Pasha again asserted that the restrictions were a different question, and emphasized the modest nature of the taxes proposed.
I said I would be very glad to submit the proposed taxes to my Government for its consideration. I warned him, however, that I had kept my Government fully informed regarding all the aspects of the question and I had every reason to expect that my Government would link the two questions and consider them together. I added that it would have been much easier for me to obtain favorable action six months, or even three or four months ago, before the restrictions were felt so severely as they are being felt at present.
Yehia Pasha handed me a printed aide-mémoire containing the tax proposals in detail.52