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Monday, 22 July 2019

Government mulls a tax break incentives for companies listing on the EGX

EXCLUSIVE- A generous tax break for companies listing on the EGX is in the making: Fawry’s planned listing comes as a government committee is looking at incentives to stimulate IPO activity in the market and attract more foreign investment in Egyptian equities. One proposal put forth by the Egyptian Capital Markets Association (ECMA) that is currently on the table is offering a 50% tax break for companies that list 35% or more of their shares on the stock exchange, government officials told Enterprise. The tax break would be effective for seven years following the execution of the IPO.

The tax cut proposal comes as part of a package of incentives that aims to stimulate trading activity on the EGX. Parliament approved last week keeping the provisional stamp tax on EGX transactions unchanged at 0.15%. The government is also looking to amend the capital gains tax (CGT) and is proposing to restore the old 10% tax rate on gains from the sale of shares in both EGX-listed and non-listed companies, among other incentives. A stamp tax would remain in place for non-residents, but would be lowered to 0.1% from 0.15%, government sources told us earlier this month.

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