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Wednesday, 12 June 2019

Legislative activity is ramping up in the House

LEGISLATION WATCH- It’s the busiest day in the House since, well, last June: It’s that time of the year, ladies and gentlemen, when our esteemed representatives are looking to close up shop before the summer recess. As is typical at this time of the year, the rate of legislative activity spikes, and yesterday we saw a number of decisions (and delays) on key pieces of business-relevant legislation:

Planning committee delays stamp tax decision: The House Planning and Budget Committee has postponed a decision on amendments that would leave the stamp tax on EGX transactions unchanged at 0.15% in FY2019-2020, Al Shorouk reports. The committee said that it did not have enough information to make a decision and that it required more time to collect EGX data. The stamp tax on stock market transactions was scheduled to increase to 0.175% on 1 June but the Finance Ministry called it off last month in a move designed to ease the financial burden on traders. The Finance Ministry introduced the tax at 0.125% in 2017, and planned to increase it annually over a three-year period.

Punitive measures set under draft Mineral Resources Act: The House Industry Committee signed off on new amendments to the Mineral Resources Act that impose harsher punishments on wildcat miners who dig and drill without a license, local press reported. Offenders could now face a minimum one-year jail sentence and a fine between EGP 50,000 and EGP 5 mn. Mining outside the boundaries of the concession area carries a fine of between EGP 100,000 and EGP 5 mn, a figure that would double for repeat violations. People who transport material from an unlicensed mine could spend between three and six months in jail and receive a fine to the tune of double the value of the material transported. Issuing a mining license on agricultural land without the approval of the Agriculture Ministry will be punished with a fine ranging from EGP 200,000 to EGP 1 mn. You can check out new details on the act that were revealed earlier this week here.

Gov’t can step in if court revokes privatization: The House’s general assembly gave its final approval to a law presented by the government that would refer certain disputes over privatization to the cabinet’s dispute resolution committee, according to the local press. The law specifically addresses cases where Egyptian courts overturn decisions by the government to sell off state assets. Egypt has seen a spate of such rulings following the events of 25 January 2011. Examples include an administrative court ruling in May 2011 that rolled-back the sale of ailing retailer Omar Effendi to Saudi business figure Gumail Al Kunbeet and a separate ruling later in the year to keep Nile Cotton Ginning Company under state control.

Real estate appraisals get committee-level sign-off: The House Economic Committee approved an amendment to the Investment Act that would set new standards for real estate appraisals and mandates the use of appraisers listed with the Financial Regulatory Authority, Al Mal reports.

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