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Tuesday, 28 February 2017

Tax Authority suggests “ideal” stamp tax rate of 0.175%

Tax Authority suggests 0.175% is an ideal stamp tax on the EGX: Tax Authority head Emad Samy says his agency’s studies suggest that a 0.175% stamp tax on the buy- and sell-side of stock market transactions would not hurt the EGX and should reel in an additional EGP 1-1.5 bn in annual revenues, according to Al Borsa. Samy said that he sent the proposal to top ministry officials to review before presenting it to the Ismail cabinet for approval.

Brokers still aren’t warming to the tax, despite it being likely to come in lower than the initial suggestion of a 0.2-0.4% levy. The Egyptian Capital Market Association, an industry lobby group, says it will is advising the Finance Ministry that anything higher than the 0.1% rate that was temporarily imposed in 2013 would reflect negatively on the EGX, the newspaper adds. Some are on the fence, with HC Securities’ Shawkat El Maraghy noting that a 0.175% stamp tax duty on transactions might be marginal for foreign investors and institutions, but would be an issue for the retail investors who account for the majority of the EGX’s turnover. Egyptian Financial Supervisory Authority head Sherif Samy had previously argued against the tax for the same reason.

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