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Wednesday, 5 January 2022

Last Night’s Talk Shows: Capital gains tax, EV talks feature on the airwaves

The capital gains tax featured on the nation’s airwaves last night, as head of industry lobby group the Egyptian Capital Market Association (ECMA) Mohamed Maher phoned into Kelma Akhira (watch, runtime: 13:22) and Masaa DMC (watch, runtime: 6:32) to discuss changes ECMA wants to see made to the law that governs a 10% capital gains tax on EGX transactions. The CGT came into effect on 1 January. Maher also leads Prime Securities.

The industry lobby seems to want changes to the package of EGX tax cuts and fee reductions recently proposed by the government, which members of cabinet discussed yesterday with representatives of the securities industry, and a group of MPs. The government announced a range of measures in November designed to soften the impact of the new 10% capital gains tax on EGX transactions. The basket of measures includes reduced trading and clearance fees and lower taxes on share swaps and earnings from equity funds.

Unfortunately, we don’t know much else: Maher didn’t say what ECMA is trying to negotiate with the government or provide an update on the talks, saying only that the lobby group will finalize its proposed amendments in a few days and hopes to present them to cabinet in the next two or three weeks.

Reminder: The capital gains tax replaced stamp duty on EGX transactions at the beginning of the year. Resident investors will now pay the 10% tax on net portfolio earnings at the end of the tax year. International investors are not subject ot the tax.

El Nasr might have a Chinese partner to produce EVs by March: The government is in talks with two Chinese companies to partner with El Nasr Automotive to produce electric cars in Egypt, Public Enterprises Minister Hisham Tawfik told Yahduth Fi Masr’s Sherif Amer (watch, runtime: 3:50). The government hopes to finalize terms later this month and sign final contracts by March, he said. The talks come after negotiations with Chinese auto firm Dongfeng collapsed in November.

Does this imply the short list has gotten shorter? El Nasr CEO Hani El Khouly said just a few days ago that negotiations are ongoing with seven international companies.

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