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Egypt Looks Forward to Restructuring Taxes of Bourse Transactions

Egypt Looks Forward to Restructuring Taxes of Bourse Transactions

Tuesday, 9 July, 2019 - 13:00
Cairo- Asharq Al-Awsat
The Egyptian Parliament’s Budget and Planning Committee has approved fixing the stamp tax on the stock exchange transactions at 1.5 per thousand until the Ministry of Finance and Stock Exchange completes the restructuring of the tax system in the market, Chairman of the Egyptian Stock Exchange (EGX) Mohamed Farid told Reuters on Monday.

“This step is only the first within the system of tax restructuring applied to stock exchange transactions,” Farid added.

“A tripartite committee, constituting of the Ministry of Finance, the Bourse and the Egyptian Capital Market Association (ECMA), has been working on the restructuring process,” he explained.

The Cabinet approved in May a bill to amend some provisions of the Stamp Tax Law in a step to back the EGX.

The amendment stipulated imposing the same proportional stamp duty on the purchase or sale of all securities whether Egyptian or foreign, listed or unlisted, without deducting any costs, which represent 1.50 per thousand to be borne by both the buyer and seller until May 16, 2020.

“I expect the parliament to approve within days fixing the tax at 1.5 per thousand,” Farid said.

Analysts from the capital market told Reuters that restructuring of the tax system could be applied to stock market transactions before the end of 2019.

These upcoming amendments to the tax system in the capital market are aimed at reviving trading and attracting more investors, both domestic and foreign, to the market.

Egypt had imposed a tax on the seller and buyer in stock transactions in May 2013 before suspending its decision.

It also imposed a 10 percent tax on cash dividends and capital gains in July 2014 and then also suspended this decision in May 2015.

In 2017, the government approved a gradual stamp tax on stock exchange transactions, starting at 1.25 per thousand on the seller and buyer in the first year of application and 1.5 per thousand in the second year, reaching 1.75 per thousand in the third year of implementation.

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