A source at the Ministry of Finance said on Wednesday that the ministry would propose to the cabinet next week to impose a gradual stamp tax on the stock market’s transactions. The suggestion is to impose a 1.25‰ tax on both buyers and sellers for the first year, to reach 1.75‰ in the third year of implementation.
The Egyptian Tax Authority had submitted a study earlier this week to the ministry, proposing a stamp tax of 1.75‰ on the stock exchange’s transactions.
Minister of Finance Amr El Garhy told Reuters on Tuesday that the new tax will be gradual to not impact the size and value of transactions.
Egypt had imposed a stamp tax on sellers and buyers on the stock-market transactions in May 2013, before it suspended it and replaced it by a 10‰ tax on dividends and capital gains in July 2014.
Amid objections from investors and market dealers, the government was forced to freeze the capital gains tax for two years until May 2017. The Supreme Council of Investment later decided to extend the freeze to May 2020.
El Garhy also told Reuters that the ministry will submit the proposal to the Council of Ministers before submitting it to the House of Representatives.