(Adds details, background)
CAIRO, March 21 (Reuters) - The Egyptian government approved on Tuesday the extension of a freeze on a capital gains tax for three years from May 17, the state news agency MENA reported.
The country originally imposed a 10 percent tax on capital gains in July, 2014, as part of efforts to replenish depleted state coffers, but the following year suspended the tax under pressure from investors for a period of two years. Tuesday’s decision extends that freeze for another three years.
The cabinet also approved a stamp duty on stock exchange transactions for both buyers and sellers set at 1.25 Egyptian pounds per 1,000 for the first year of the tax’s introduction, rising to 1.5 pounds in the second year and 1.75 in the third.
It will also impose a levy of 3 pounds per 1,000 for investors buying or selling more than a third of a company’s stocks.
The Finance Ministry targets raising revenues of 1-1.5 billion Egyptian pounds ($54.8 million-$82.2 million) in the first year of the new stamp duty, Deputy Finance Minister Amr al-Munayer told Reuters on Monday.
The extension to the capital gains tax freeze and the new stamp duty were introduced in a bill amending Egypt’s income tax laws and are subject to a vote in parliament before President Abdel Fattah al-Sisi can sign it into law.
Investors had said the capital gains tax discouraged business at a time Egypt was struggling to recover from the 2011 uprising and subsequent political upheaval. (Reporting by Ali Abdelaty; Writing by Ahmed Aboulenein; Editing by Hugh Lawson and Richard Lough)
Our Standards: The Thomson Reuters Trust Principles.