The Egyptian government is to impose a monthly tax on Syrian refugees starting this summer which will be increased annually according to Syria Call news agency.

The tax, which must be paid by all foreigners in Egypt from July, will start at 200 Egyptian pounds ($11) and be increased by a further 100 pounds ($5.6) every year until 2021.

The law, proposed by MP and Chairman of the Committee on Defence and National Security Kamal Amer, was approved as a form of compensation for “increasing the financial burden” incurred by the state to provide public services such as health, water, sanitation and infrastructure.

Amer argued that the increase of foreigners in the country has resulted in significant costs to the government, and that the tax would help reduce the budget deficit.

The 200 pound tax is likely to bring added hardships to foreigners, particularly the five million refugees in the country. The government alleges that half a million Syrians have fled to Egypt since the outbreak of war in 2011, although only around 130,000 have been officially registered.

Read: UNHCR: 85% of Syria families in Jordan live below poverty line

Whilst the government has claimed the tax is required as compensation, according to a 2017 UN report, Syrian refugees have invested around $800 million in the economy since the start of the crisis. The influx of people, in addition to the private capital and expertise, has fuelled the growth of businesses in the country, with thousands setting up independent companies or working in the informal economy.

The new tax move is the latest in a series of measures taken by the government as part of President Abdel Fattah Al-Sisi’s severe economic reform programme and conditional loan agreements with the International Monetary Fund (IMF) and World Bank. Whilst the IMF praised the Egyptian government’s efforts last year, earlier this month it emphasised that the country must deepen reforms and cut back state funding to achieve higher growth.

In August, inflation in Egypt reached its highest level since 1986, at 33 per cent; the country had struggled with the devaluation of its currency to half its value for many months, after it was floated by the government in 2016. Finance authorities also introduced VAT for the first time, increasing the cost of countless goods; it simultaneously cut state subsidies on fuel, electricity and water.

The policies have added to the financial woes of many millions of Egyptians living below the poverty line, who have complained of being unable to afford basic necessities since the price jumps. However, last month it was reported that President Al-Sisi simultaneously approved a law that allowed for an increase in the salaries of senior state officials.

Read: Egypt’s foreign debts reach $82bn