Egypt to replace capital gains tax with stamp duty to boost stock market

Egypt will replace the capital gains tax on securities transactions with a stamp duty and offer tax incentives for newly listed companies under a package of measures aimed at boosting activity on the Egyptian Exchange (EGX), Finance Minister Ahmed Kouchouk said on Monday.

Speaking at an investor conference at the EGX, Kouchouk said the measures were designed to encourage new listings, increase market liquidity, reduce transaction costs, and strengthen the capital market’s role in financing economic growth.

Under the package, the government will replace the capital gains tax on securities transactions with a stamp duty, a move aimed at easing the tax burden on investors and stimulating trading activity.

The reforms also introduce a tax credit equal to 15 per cent of the tax due for large companies that list on the Egyptian Exchange. The incentive will be available for three years to encourage more companies to go public.

Kouchouk said the stamp duty rate for non-resident investors would be reduced to 0.5 per thousand from 1.25 per thousand, creating what he described as a more balanced tax framework between resident and foreign investors.

The measures also exempt market makers from stamp duty on purchases and sales of listed securities in a bid to support market liquidity.

“We view the capital market as a key engine of economic growth and investment financing,” Kouchouk said.

He said the government was continuing efforts to simplify tax procedures, lower transaction costs, improve market liquidity, and strengthen the Egyptian Exchange’s role in mobilising savings to finance investment and economic development.

The measures form part of Egypt’s broader efforts to deepen capital markets, attract new listings and expand private-sector participation under the country’s ongoing economic reform programme.

Attribution: Amwal Al Ghad English