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Tuesday, 19 May 2020

House gives preliminary nod to stamp tax amendments, looks set to give tax break to state-owned enterprises, suspends agriculture land tax

LEGISLATION WATCH- House gives preliminary nod to stamp tax amendments, looks set to give tax break to state-owned enterprises, suspends agriculture land tax: The House of Representatives’ general assembly yesterday gave preliminary approval to government proposals to cut stamp tax on EGX transactions and withholding tax on dividends, Al Mal reported. The planning committee last week decided to cut the stamp tax on EGX transactions to 0.075% instead of 0.05% to narrow the tax rates charged to resident and foreign investors. The amendments would also slash the tax on dividend payouts by listed companies to 5% from 10%.

Capital gains tax break for state-owned enterprises gets initial approval: The House gave preliminary approval to amendments to the Income Tax Act that would hand state-owned enterprises in which the government owns a minimum 51% stake a capital gains tax break. Under the proposals, companies would not be charged capital gains tax on the sale of land to banks as part of debt settlements.

House approves two-year suspension of agriculture land tax: The House of Representatives has approved a two-year suspension of the 14% tax on agricultural land (known informally as the “mud tax”), a day after the legislation was discussed by the agriculture and planning committees, Al Mal reported yesterday. The law extends an existing three-year suspension approved in 2017 until 2022. Finance Minister Mohamed Maait told parliament yesterday that the new suspension is designed to provide support to farmers through the covid-19 crisis, after some lawmakers demanded that the tax be abolished completely.

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