LEGISLATION WATCH- House committee curbs EGX stamp tax cut for resident investors: The House Planning and Budgeting Committee yesterday approved legislative changes to cut stamp taxes on EGX transactions and withholding tax on dividends, the local press reported. The cabinet approved plans in March to slash stamp tax to 0.05% from 0.15% but the committee yesterday decided to scale back the size of the tax cut to 0.075%. The decision was taken to narrow the tax rates charged to resident and foreign investors, said Yasser Omar, deputy head of the committee.

Foreigners will keep their tax break: The committee approved cabinet proposals to cut stamp tax for foreign investors to 0.125% from 0.15% and signed-off on plans to slash the withholding tax on dividends to 5%.

Intraday transactions will no longer be tax-exempt: Stamp tax will be charged on intraday transactions for both resident and foreign investors to “reduce speculation,” Omar said.

Background: The stamp tax was introduced as a temporary measure in 2017 in response to an investor revolt against the 10% capital gains tax. The capital gains tax was due to be reintroduced this year, but will be shelved until 1 January 2022 if the legislative changes make it through the House.