Back to the complete issue
Wednesday, 5 December 2018

Egyptian government to investors: We’re staying the course on the IPO program, and the tax treatment of banks is in line with international norms

Gov’t to investors: We’re staying the course on the IPO program; the tax treatment of banks is in line with international norms. Finance Minister Mohamed Maait and Public Enterprise Minister Hisham Tawfik briefed investors yesterday at a Beltone investor access event. Among the highlights, according to a research note circulated after the event (pdf):

  • The government is holding the line on the sale of state-owned companies via IPO and accelerated book builds, Tawfik said. The core issue is the intersection of timing and price. Expect the state’s plans for the second phase of the IPO program to be made clear by year’s end;
  • A parallel restructuring drive continues as the Tawfik’s ministry looks not just to bring loss-making companies to profitability (or liquidate them, as we’ve previously reported), but also to help profit-making companies in insurance and maritime transport “realize their full potential”;
  • Dormant state assets, mostly land, will be transferred to the sovereign wealth fund;
  • Finance Minister Mohamed Maait recapped current macro indicators with a focus on GDP growth (5.8% this fiscal year) and deficit reduction. This is helping fund social security measures and comes as the state is making progress on debt reduction.
  • The tax treatment of bank holdings of bills and bonds is simply fair, Maait suggested: “The current tax rate on the proceeds of government securities is set at 20%, while the tax on commercial and industrial profits at 22.5%. He added that the move ensures tax equality with regards to financial institutions investment in government securities and also the fair collection of taxes due on profits earned from the rest of their activities.”

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Etisalat Misr (tax ID: 235-071-579), the leading telecoms provider in Egypt; and Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt.