Arab Finance: The Egyptian government is planning to submit a draft law to the parliament in February to cancel the capital gains tax on the Egyptian Exchange (EGX) transactions and reimpose a flat stamp tax, four unnamed government officials told Asharq Business.

The move aims to attract investors and support the government’s program to list state-owned companies on the stock market.

Over the past decade, the EGX had experienced fluctuations in taxation policies, alternating between a stamp tax on transactions and a tax on annual capital gains.

The latter has never been implemented due to the lack of a clear collection mechanism and concerns over its potential market impact.

The Egyptian cabinet approved a draft law submitted by the Minister of Finance to eliminate the capital gains tax after introducing certain amendments, according to one source.

The proposal is expected to be submitted to the House of Representatives this month, with the government seeking approval before the current parliamentary session ends in June 2025, the source added.

Minister of Investment and Foreign Trade Hassan El-Khatib had previously indicated that the government was considering scrapping the tax to boost stock market activity.

Another source noted that the planned stamp tax would be imposed at a "small percentage," making it less burdensome for investors while generating stable tax revenues.

He noted that a simplified tax system would enhance Egypt’s stock market appeal and encourage higher trading volumes, particularly as the government prepares to offer more state-owned companies for public subscription.

Egypt first introduced a stamp tax in 2013, collecting EGP 350 million in its first year.

When reinstated in 2017, revenues grew to EGP 354 million, EGP 583 million, and EGP 729 million over the following three years.

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