The Egyptian Public Tax Authority said that it conducted a study concluding that a 0.175% tax should be imposed on the stock exchange transactions of both the seller and the buyer.
Emad Samy, head of the authority, said in a statement that the study explained that a tax at these rates will not negatively impact the activity of the capital market.
He added that they sent the study to the Ministry of Finance in preparation for its submission to the cabinet for approval.
The Ministry of Finance recommended re-examining the use of the stamp tax on stock exchange transactions, with a proposed rate of 0.2%.
Mohamed Maher, vice chairperson of the Egyptian Capital Market Association (ECMA), said that the specified rate by the government is too high and will adversely affect the performance of the market.
He added that the ECMA renewed its recommendations and suggestions on not increasing the rate of the stamp tax on the stock exchange transactions to more than 0.1%.
Egypt imposed a stamp tax for the first time at a rate of 0.1% on both the buyer and seller transactions in the stock exchange in May 2013 and collected more than EGP 350m before stopping it and imposing a tax of 10% on dividends and capital gains in July 2014.
After objections from investors and those in charge of the money market, the government froze the capital gains tax for two years until May 2017.
The Supreme Council for Investment subsequently decided to extend the freeze until May 2020.