Egypt plans to replace capital gains tax with a stamp duty to stimulate institutional investment in the stock exchange, Finance Minister Ahmed Kouchouk announced on Wednesday, as part of a second package of tax facilities aimed at supporting the business community.
Speaking at a weekly press conference in the New Administrative Capital, Kouchouk outlined an “integrated strategy” to ease burdens on taxpayers, which includes cutting Value Added Tax (VAT) on medical devices and exempting transit trade from levies.
The minister stated that the government would shift to a stamp duty system instead of capital gains tax to incentivise institutional investment in the Egyptian Exchange. Additionally, the ministry will coordinate with the Financial Regulatory Authority to grant tax benefits to companies listing on the bourse for a period of three years, provided there is a tangible improvement in trading volumes.
In a move to support the healthcare sector, Kouchouk announced new legislation to reduce VAT on medical devices to 5% from the current 14%. The package also includes a full VAT exemption for components and supplies used in dialysis and kidney filters. To further encourage investment, the suspension period for VAT payment on machinery and medical equipment will be extended to four years.
The package also targets the logistics sector, with legislative amendments planned to ensure VAT is not applied to goods in transit or related services, a measure designed to boost global transit trade through Egypt.
“The second package targets meeting investor demands and strengthening partnership and support with all taxpayers to expand the tax base,” Kouchouk said. He added that the proposals would be put forward for “social dialogue” to incorporate feedback.
For strategic industries, the minister said private sector companies contributing to strategic projects would be allowed to deduct interest on foreign loans from their tax base. These firms will be exempted from the maximum limit for approving loan interest, facilitating financing without additional burdens.
The ministry also plans to introduce a “White List” for compliant taxpayers, offering incentives such as a “card of excellence” and expedited VAT refunds within one week. Kouchouk noted that EGP 7.2bn in VAT was refunded during the 2024/25 fiscal year, a growth rate of 151%.
Other measures aimed at streamlining administration include:
- Real Estate:A set tax of 2.5% on the sale value of property units, applicable regardless of the number of disposals, with a new mobile application to facilitate payments.
- Small Business:Continuation of the simplified tax system for businesses with an annual turnover not exceeding EGP 20m.
- Company Liquidation:A new electronic system to process company closures and liquidations as quickly as possible.
- Disputes:A proposal to renew the Tax Dispute Resolution Law and improve internal committees to resolve issues faster.
Kouchouk also confirmed that the ministry is preparing a legislative amendment to the Unified Tax Procedures Law to allow the issuance of a temporary tax card for four months to speed up company incorporation.
