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Sunday, 26 March 2017

Finance Ministry drafts amendments to stamp and income tax laws to incorporate new stamp tax proposal

The stamp tax is becoming official: The Finance Ministry has finished drafting amendments to the Income Tax Law to incorporate the stamp tax on EGX transactions okayed by the Ismail cabinet last week, Al Borsa reports. The amendments will impose a 0.125% levy, that will gradually increase to 0.175% over a three-year span, on the buy- and sell-sides of all capital market transactions, as well as a 0.3% duty on transactions where 33% or more of a company’s shares are being sold. Expect the legislative equivalent of the full meal deal: The wording will pass through cabinet and the Council of State before being sent to the House of Representatives for approval, according to deputy Finance Minister Amr El Monayer. Meanwhile, the implementation of the capital gains tax has been pushed off for another three years.

More changes to the Income Tax Law coming? Beyond the stamp tax, it would appear that the Finance Ministry is working on revamping the tax code yet again, only this time with the aim of “making it more progressive” and “in the interest of social justice,” according to a statement by Deputy Finance Minister Amr El Monayer on Thursday. These changes will include more generous tax refunds and rebates for those in the lower income brackets who pay less taxes, said El Monayer. He added that the ministry is considering multiple ways to implement this, but the jist of it is, the less taxes you pay, the higher the refund you will get. El Monayer added that the ministry is also amending the tax code to include the incentives under the Investment Act.

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