Egyptian President Abdel Fattah Al-Sisi is expected to ratify the stock market’s stamp duty tax in two days to come into effect starting next Thursday, a senior governmental source told Daily News Egypt on Sunday.
“The decision is awaiting signature by the president on Tuesday or Wednesday at maximum. It will come into effect this week, God willing,” the source said.
The tax was approved by the cabinet in March this year and is set at EGP 1.25 per 1,000 for this fiscal year (FY), 2017/18, is to rise to EGP 1.5 in the second year and to EGP 1.75 in the third.
“We expect to generate around EGP 1-1.5 billion in the coming fiscal year,” Amr El-Monayer, deputy minister of finance for tax policies, told Daily News Egypt.
The tax was first introduced in May 2013 and was set at EGP 1 per 1,000, collecting more than EGP 350m.
In 2014, Egypt suspended the stamp duty and imposed a 10% tax on capital gains in July of the same year. In May 2015, Egypt then decided to halt the capital gains tax for two years following strong objections from investors.
The government extended the capitals gains tax suspension in March for another three years—until 16 May 2020.
The stamp duty will now impose a levy of EGP 3 per 1,000 for investors buying or selling more than a third of a company’s stocks.
The tax is part of Egypt’s commitment to the International Monetary Fund (IMF), which called to impose either a capital gains tax or a stamp duty on stock market transactions by FY 2017/18.