Cabinet approves bill to cancel 3rd tranche of stamp tax law

CAIRO - 9 May 2019: The Cabinet approved a bill to amend some provisions of the Stamp Tax Law No. 111/1980 in a step to back the Egyptian Exchange (EGX), according to an official press release on Thursday.

The amendment stipulates imposing the same proportional stamp duty on the purchase or sale of all securities whether Egyptian or foreign, listed or unlisted, without deducting any costs which represent 1.50 per thousand to be borne by both the buyer and seller until May 16, 2020.

On Tuesday, Ministry of Finance completed a bill cancelling the third raise of the stamp duty on the stock exchange to stand at 1.50 per thousand.

Earlier this month, the government started to apply the third tranche of stamp duty on the stock exchange of 1.75 per thousand paid by the buyer and 1.75 per thousand paid by the seller.

The Ministry of Finance imposed stamp duty on securities trading in mid-May 2017 by 1.25 per thousand, and then rose to 1.50 per thousand in May 2018. It is expected that the duty rises to 1.75 per thousand in the third year to be implemented in May.

The stamp duty was imposed due to the failure to apply the capital gains tax.

Vice Chairman of Horizon Company for securities trading Mutasem al-Shahidi said previously that the high cost of trading on EGX due to imposing a stamp duty of 1.5 per thousand on all transactions, whether profit or loss was one of the reasons behind the downtrend that EGX faces currently.

The Ministry of Finance aims to collect total taxes of LE 2.5 billion in the coming fiscal year 2019/2020.