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 Rasha Abdel Aal, Head of the Egyptian Tax Authority (ETA), announced the approval of a comprehensive package of tax incentives and benefits tailored for the securities sector. The move, coordinated fully with the Ministry of Finance and the Financial Regulatory Authority (FRA), aims to revitalize the Egyptian stock market and bolster the national economy.

These measures fall under the second package of tax facilitations, implementing the directives of Minister of Finance Ahmed Kouchouk to support compliant taxpayers and stimulate domestic investment.

Key Legislative Amendments

Abdel Aal explained that amendments have been introduced to the Income Tax Law No. 91 of 2005 and the Stamp Duty Law No. 111 of 1980. The primary goals of these amendments are to eliminate double taxation associated with dividend distributions and to offer a cash incentive for companies that list their shares on the stock exchange, subject to specific regulatory criteria.

Furthermore, the amendments stipulate that capital gains resulting from the disposal of listed securities are fully exempt from income tax. Instead, these transactions will only be subject to the proportional stamp duty outlined in the Stamp Duty Law.

Transparency and Tax Justice

Highlighting the authority's commitment to transparency and fair taxation, Abdel Aal noted that the sale of unlisted securities has been entirely excluded from the stamp duty. These transactions will solely be subject to income tax, effectively putting a definitive end to double taxation in this area.

The new directives also grant an exemption from the stamp duty for "Market Maker" activities. This step is designed to support their vital role in enhancing the overall efficiency of the Egyptian Exchange (EGX), boosting liquidity rates, and driving trading volumes.

To further ease the burden on taxpayers, the ETA has established a clear and transparent mechanism for calculating the acquisition cost of unlisted securities. This aims to simplify the tax accounting procedures for capital gains generated from the sale of such securities, facilitating tax compliance and ensuring greater clarity in regulatory application.