(Corrects headline and first paragraph after MCDR corrects starting date of tax implementation)
CAIRO, July 3 (Reuters) - Egypt started implementing a new capital gains tax on Wednesday in a bid to increase the country’s sources of revenue following more than three years of economic and political turmoil.
The managing director of Misr For Clearing, Settlement and Central Depository (MCDR), Tareq Abdel Bary, told Reuters on Thursday that his organisation started implementing the tax on Wednesday which will be financially settled on Sunday.
Egypt’s President Abdel Fattah al-Sisi passed the law on Tuesday, imposing a 10 percent tax on capital gains and stock dividends as the cash-stripped country of 85 million seeks to boost revenue to help its ailing economy.
“We will deduct 6 percent of the realised profit from foreign investors with each transaction under the tax account but for the Egyptian investors we will record the realised profits and send them to the tax authority which will collect,” Bary added.
The finance ministry had initially set an annual tax-free limit of 10,000 Egyptian pounds ($1,400) on cash dividend payments for individual residents in Egypt but the tax was watered down last month after news of it caused the stock market to record its biggest daily drop in almost a year.
Egyptian officials said last month the tax threshold would be raised to 15,000 pounds but in the official gazette, published on Thursday, the tax-free exemption was still limited to 10,000 Egyptian pounds. (Reporting Ehab Farouk; Writing by Asma Alsharif; Editing by Mark Potter)