Due to the substantial early losses, the Egyptian Exchange (EGX)’s management decided to halt trading for 30 minutes. Egypt’s stocks incurred early losses amounting to 15.7 billion driven by the newly-announced capital gains tax. The main stock index, EGX30 dived by 5.32% at opening sessions.
Trading sessions will be resumed at 11:45 a.m. Cairo time (08:48 GMT).
Egyptian government has approved the introduction of a 10% capital gains tax on profits made on the stock market, Egyptian Finance Minister Hany Kadry Dimian announced last Thursday.
The tax is part of the first phase of income tax reforms in the country expected to bring in 10 billion Egyptian pounds ($1.40 billion), Dimian said. He said the tax would not be retroactive and would be implemented once a law was issued.
“The cabinet agreed to impose a 10 percent tax on net capital gains that individuals make at the end of the tax year,” Dimian said. “A tax of 10 percent was also imposed on cash dividends and bonus shares.”