The Egyptian government is working on amending the payment method of a new tax on stock dividends and capital gains, the finance minister said Thursday, dampening market expectations of any big changes to the unpopular levy.
President Abdel Fattah al-Sisi approved a law imposing a 10 percent tax on stock dividends and capital gains last July as part of efforts to overhaul an economy battered by years of political turmoil.
But Egyptian investors say the law is causing confusion and hampering investment, and filed a lawsuit against the government this week demanding changes to certain aspects of it.
“The main amendments we are working on are over the tax payment mechanism,” Hani Qadry Dimian told reporters at a news conference, without elaborating.
Traders have said the market does not understand how the tax will be calculated or collected, adding to uncertainty heightened by an indefinite delay to parliamentary elections.
The stock market hit a four-month low in early trade on Tuesday, but later rebounded on hopes for a compromise on the tax.
Although the law was approved in July, the “executive regulations”, which stipulate how it will be applied, were not published until this month and investors say there are many ambiguities.