WATCH THIS SPACE- One MP wants to turn legislators away from capital gains tax: House Planning and Budgeting Committee Secretary Abdelmoneim Emam has handed a briefing request to the house speaker in a bid to sway lawmakers away from reintroducing capital gains tax on the EGX, tell’s Al Borsa’s print edition (pdf). According to Emam, the tax would be tantamount to dual taxation as EGX investors are also shareholders and essentially company owners who pay corporate taxes.

The request should make it to the committee’s docket next week to set a date for discussions that could potentially lead to legislation to scrap the tax altogether, Emam said.

Finance Minister Mohamed Maait last month confirmed that the tax, which was postponed several times in recent years, would come into force on 1 January, meaning from 2022 Egypt-domiciled equity investors will start paying a 10% tax on their net portfolio earnings. Domestic investors — who presently account for the bulk of turnover on the EGX — will be the only ones on the hook for the tax after the ministry decided to exempt non-residents.

A group of 20 MPs said last month they were working on a bill aiming to postpone the tax for another year. The group of 20 lawmakers, led by businessman and deputy chair of the House of Representatives’ industry committee Mohamed El Sallab, claimed that the proposed 10% tax on stock market transactions could deal a fatal blow to stock trading, especially that the bourse is still recovering from the impact of the pandemic. The finance industry has also pushed back, arguing along the same lines and suggesting that the tax is being introduced at an inappropriate time.

Cabinet isn’t having any of it: Public Enterprise Minister Hisham Tawfik last week downplayed the potential negative impact of the tax on the privatization program, saying plans to push ahead with the state IPO program would be unaffected.

MPs are suggesting alternatives to the CGT: One is suggesting that the government levy a development fee on market transactions instead, while another wants to replace it with a stamp tax. They have yet to make clear how their alternative taxes would be more palatable to local investors than what Maait is pushing through.