By Mohamed Ahmed
The Egyptian Tax Authority began directing official statements to Egyptian investors in the Egyptian Exchange (EGX) on all those registered in the accounts data in EGX and Misr for Central Clearing Depository and Registry (MCDR) demanding them to provide tax returns and pay the taxes on capital gains achieved since 1 July 2014 until 31 December 2014, according to sources familiar with the taxes file.
The government approved imposing a 10% tax on capital gains in EGX in July before President Abdel Fattah Al-Sisi issued a decision to postpone capital gains tax for two years while continuing to collect 10% taxes on cash gains distributions.
According to sources, MCDR allows investors to check profits and losses settlements until the end of 2014 in order to estimate the amount of taxes owed by investors.
The sources said the authority has not addressed Egyptian investors until now regarding taxes on capital gains achieved since 1 January to 17 May, 2015, which coincided with the issuance of the postponement law.
MCDR deducted 6% off capital gains achieved by foreign investors and forwarded them to the taxes authority during the period when the law was valid.
Letters have already reached some of the traders in EGX, Eagle Advisors chairman Yasser Emara said and it is one of the steps that cause frustration in the market because investors have suffered huge losses over the past few months.
Emara believes it is better for the authority to coordinate with MCDR by sending the later data of customers who achieved capital gains to address only this segment instead of sending data of all clients, including investment portfolios that have recorded losses.
EGX30’s main index recorded an increase by 9.36% during the second half of 2014, where it increased since 1 July from 8162.2 points to 8926.6 points by 31 December.