EGX - REUTERS
CAIRO - 30 May 2016: The Egyptian Exchange (EGX) indices closed at mixed performances Tuesday, a day after the Parliament’s approval of the stamp tax.
Main index EGX30 slightly inched up 0.24 percent, standing at 13,239 points, while the small and mid-cap enterprises index EGX70 fell 0.11 percent, hitting 575.4 points. EGX100 index hiked 0.15 percent, closing at 1,367 points.
Market capitalization gained about LE 1.66 billion ($92.2 million), totaling LE 675.05 billion.
Egypt’s Parliament approved Monday amendments to the Income Tax Law No. 91/2005 and Stamp Tax Law No. 111/1980, to impose a stamp tax on the Egyptian Exchange transactions for three years, to be a substitution for the Capital Gains Tax, currently suspended.
Deputy Minister of Finance Amr el-Monayer said Tuesday that the stamp tax will be effective as of June 1, adding that it is expected to be published in the Official Gazette next week.
Monayer added that officials from the Ministry of Finance and Misr for Central Clearing, Depository and Registry (MCDR) to discuss implementing the methodology and items of the tax next week.
The expected revenue of the tax is anticipated to be LE 1 billion in the first fiscal year of implementation, to be increased according to the stock market transactions, he noted.
The MCDR will be responsible for the tax calculation.
The tax will be applied to both buyers and sellers at LE 1.25 per 1,000 transactions for the first year, to gradually increase to LE 1.5 in the second and LE 1.75 in the third.
The cabinet has approved to re-impose the tax in March, after it was imposed in May 2013, to be halted again in July 2014, which marked the start date of a 10 percent Capital Gains Tax.
After a strong rejection from the stock market investors and brokerage companies, the government suspended the tax for two years in May 2015, before being halted for three more years, ending 2020.