Egypt has unveiled its second tax facilitation package, a cornerstone in its broader reform agenda aimed at easing operational burdens while invigorating capital market activity. Building on the first package’s SME-focused measures, the new framework introduces incentives designed to attract influential companies to the Egyptian Exchange (EGX), reduce transaction costs, and strengthen investor participation.
Finance officials, led by Minister of Finance Ahmed Kouchouk, emphasize that the reforms emerged from extended dialogue with market participants, reflecting a dual strategy of supporting private-sector expansion while positioning the capital market as a driver of investment and liquidity.
Comprehensive Tax Reforms
Egypt’s second tax facilitation package introduces a set of targeted incentives designed to ease compliance burdens and stimulate capital market activity. To encourage more companies to join the EGX, the new amendments introduce a 15% cash rebate on declared taxes for three years.
In this regard, Sherine Ghaly, Associate Professor of Economics at the Institute of National Planning, tells Arab Finance: “This tax incentive for listed companies could improve Egypt’s investment climate by making an initial public offering (IPO) more attractive to large businesses. It could give investors a wider range of companies to invest in, improve market liquidity, and attract additional domestic and foreign capital.”
Other key measures include low-cost financing for the first 100,000 taxpayers joining Egypt’s simplified and integrated tax system, an extension of the tax dispute settlement law through December 31, 2026, and a new “White List” and Distinguished Taxpayer Card to provide compliant taxpayers priority services.
The package also seeks to accelerate value-added tax (VAT) refunds, including immediate refunds for White List members, eliminate double taxation on dividends between holding and subsidiary companies, replace capital gains tax on listed securities with stamp duty, introduce temporary tax cards to speed up company registration, and cut VAT on medical devices from 14% to 5%.
Speaking to investors at an EGX conference, Kouchouk stated that everyone would benefit from the new tax facilities. He added that the tax facilities "come from the market, the private sector, and specialists" through an extended dialogue within a framework built on trust and partnership. The reforms aim to strongly support the capital market and attract large, influential companies, and help all companies expand.
Mohamed El-Okda, Head of the Tax Dispute Resolution Committee and Public Finance and a tax policy expert, tells Arab Finance: “The recent tax reform package represents an important step in modernizing Egypt’s tax system. Its significance goes beyond financial incentives: it also seeks to simplify procedures, support investment and production, strengthen voluntary compliance, and enhance tax certainty.”
El-Okda adds that “the next phase, however, should move beyond individual tax incentives toward a comprehensive framework for tax competitiveness,” including digital transformation of tax administration, real-time data integration across government agencies, lower compliance costs, faster refunds and dispute resolution, and clearer rules for the digital economy and cross-border services.
In his view, “tax certainty and legislative stability are also becoming critical components of economic competitiveness. Investors look beyond statutory tax rates; they seek predictability, consistent application of the law, efficient administration, and effective dispute resolution. In the digital economy, the quality and speed of tax administration can be just as important as the tax rate itself.”
Tax Incentives and Capital-Market
Building directly on these broader administrative reforms, the package’s capital-market element is especially significant. Law No. 151 of 2026 offers listed companies a 15% deduction from income tax due for three years, under specific conditions. Meanwhile, Law No. 153 of 2026 revises the stamp duty treatment of listed securities, including lower rates for same-day trading and an exemption for licensed market makers. Together, these measures are meant to improve liquidity, reduce trading costs, and make the EGX more attractive to prospective issuers.
However, experts emphasize that fiscal relief alone is not a silver bullet. El-Okda cautions that tax incentives can be “an important catalyst for listings, but not sufficient on their own.” He argues that companies’ decisions to list depend on a wider set of factors, including the cost and complexity of the listing process, disclosure and governance requirements, concerns among family-owned firms about transparency and oversight, and the availability of alternative financing.
He also stresses that market depth and valuation are critical, as companies need confidence that the exchange can deliver sufficient liquidity, effective price discovery, and valuations that reflect their potential.
Meanwhile, Ghaly highlights how transparency and simplified compliance frameworks can boost investor confidence. “Tax transparency and simplified compliance frameworks can boost investor confidence in Egypt’s markets by making the rules clearer and compliance less costly,” she explains. She notes that reforms under Law No. 151, including proportional stamp duty and listing incentives, help investors price risk more confidently, which is essential for deeper capital markets and stronger participation.
Private Sector Response
The private sector’s response will likely determine whether the package becomes a genuine listing catalyst or remains mainly a signaling tool. El-Okda notes that increasing the number of listed companies requires a holistic ecosystem that combines tax incentives with simpler listing procedures, competitive listing costs, deeper market liquidity, stronger institutional investor participation, effective valuation and price discovery, and structured support for family-owned businesses transitioning toward more institutional models of governance.
In short, he says, Law No. 151 addresses the incentive side, while Law No. 153 improves the efficiency and liquidity of market transactions. The long-term success of Egypt’s listing strategy will depend on making the EGX a more attractive and credible platform for corporate financing, valuation, and sustainable growth.
To anchor this institutional evolution, this broader ecosystem also needs a compliance and digitalization layer. El-Okda points out that Egypt should continue advancing the digital transformation of tax administration, strengthening real-time data integration, and reducing compliance costs.
Complementing this view, Ghaly identifies a connection between capital-market incentives and Egypt’s push toward digital tax administration. “Capital-market incentives and digital taxation reforms can complement each other,” she explains. E-invoicing and other digital systems could improve the tracking and administration of taxes while helping companies prepare for the financial reporting standards associated with public listing. “Digital tax compliance can also help companies prepare for the financial reporting requirements of being publicly listed, while the tax incentive provides an added incentive to formalize operations and improve record-keeping.”
According to Ghaly, the combination of both reforms could generate broader benefits for the economy. “If both reforms are successfully implemented together, Egypt could have better transparency, more investor confidence and a broader tax base.”
At the same time, practical challenges must be managed. Ghaly suggests that the package could support formalization. “However, there may be upfront costs for small businesses with regard to accounting software, training staff and integrating systems, and so hands-on support will be necessary to guarantee that digital compliance does not deter businesses from formalizing,” she points out.
Egypt's second tax facilitation package combines targeted financial incentives with compliance reforms to boost the EGX and ease operational burdens. While these measures lay a strong foundation, experts stress that long-term success relies on a holistic approach that pairs tax relief with streamlined procedures, legislative stability, and digital support to transform the investment climate.
By Sarah Samir
