Egypt is introducing new tax measures designed to strengthen its capital market by changing how listed securities are taxed and encouraging more companies to go public.

Why You Should Care

Egypt is revising its tax framework for capital markets in an effort to make the Egyptian Exchange (EGX) more competitive and attractive to investors. The changes remove income tax on capital gains from listed securities, replacing it with a proportional stamp duty. They also introduce financial incentives for qualifying companies that list on the exchange.

The measures form part of the government’s second package of tax facilities. This aims to encourage investment, support capital market activity, and simplify tax procedures.

The Details

Head of the Egyptian Tax Authority (ETA), Rasha Abdelaal, stated that the changes to Income Tax Law No. 91 of 2005 and Stamp Duty Law No. 111 of 1980 also introduce cash incentives for companies that list their shares on the Egyptian Exchange in accordance with specific criteria.

Under the new framework, capital gains on listed securities will be exempt from income tax and will instead be subject only to a proportional stamp duty. According to the Egyptian Tax Authority, the change is intended to improve the competitiveness of the Egyptian Exchange and attract additional investment.

The amendments also introduce cash incentives for companies that list their shares on the Egyptian Exchange (EGX), provided they meet specified criteria.

The amendment addresses various tax issues related to the stock market. It primarily resolves double taxation on dividend distributions. At the same time, transactions involving unlisted securities will be excluded from stamp duty and subject only to income tax. This is intended to achieve tax fairness and eliminate double taxation.

In addition, market maker activities will be exempt from stamp duty. This is due to the important role market maker activities play in increasing trading volumes and enhancing liquidity on the Egyptian Exchange.

The amendments also establish a simplified mechanism for determining the acquisition cost of unlisted securities. The measure is intended to make capital gains tax calculations more straightforward, simplify tax accounting procedures, and provide greater clarity for investors.

The Ripple 

The amendments affect several participants across Egypt’s capital market. Investors in listed securities will operate under a revised tax framework, while companies considering an IPO will benefit from the new listing incentives. Market makers also receive tax relief intended to support trading activity and liquidity on the Egyptian Exchange.

What to Watch

The Ministry of Finance, the Egyptian Tax Authority (ETA), and the Financial Regulatory Authority (FRA) will coordinate the implementation of the new measures.

The new tax framework will apply the revised treatment for listed and unlisted securities while introducing the announced incentives for eligible companies listing on EGX.