Egypt president ratifies capital gains tax freeze extension, approves stamp duty

FILE PHOTO: Egyptian President Abdel Fattah al-Sisi delivers a statement following a meeting with French President Francois Hollande at the Elysee Palace in Paris, France November 26, 2014. REUTERS/Philippe Wojazer/File Photo

CAIRO (Reuters) - Egypt’s President Abdel Fattah al-Sisi has signed off on 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, a decree published in the official gazette on Thursday showed.

The stamp duty, which will take effect immediately, will rise to 1.5 pounds in the second year and 1.75 in the third.

The Finance Ministry said in March it aimed to raise revenues of 1 to 1.5 billion Egyptian pounds ($55 million-$82 million) in the first year of the new stamp duty.

Sisi also approved extending a freeze on capital gains tax for three years.

The country originally imposed a 10 percent tax on capital gains in July 2014 as part of efforts to replenish depleted state coffers. But it suspended the tax a year later under pressure from investors for a period of two years. Thursday’s decree extends that freeze for another three years.

Investors had said the capital gains tax discouraged business at a time when Egypt was struggling to recover from the 2011 uprising and subsequent political upheaval.

Sisi on June 1 ratified a long-delayed investment law aimed at making business easier and creating incentives to lure back investors after years of turmoil. Investors are waiting for more details on the law before pouring money back into Egypt.

The new law is expected to boost badly needed investment by cutting bureaucracy, especially for new projects, and providing more incentives to investors looking to put money into Egypt.

Reporting by Amina Ismail; Editing by Hugh Lawson