The House of Representatives has approved amendments to the stamp duty law No 111 of 1980 and the Income Tax Law No 91 of 2005.
The amendments will see the stamp duty on the Egyptian Exchange (EGX) transactions for residents reduced to 0.5 per thousand on listed and non-listed securities. The tax will be 1.25 per thousand on stock market transactions for non-residents. There will be a full tax exemption on day trading.
The amendments will also re-introduce the capital gains tax at 10% of the net profits achieved by the investor annually.
Taxable capital gains are determined on the basis of the net capital gains of the securities portfolio achieved at the end of the tax year. This is based on the difference between the sale or exchange price or any form of disposal of securities or shares, and the cost of their acquisition after deduction of the brokerage commission.
The responsible authority for settling sales operations shall transfer the tax to the competent tax office within five days of the following month.
Mohamed Maher, President of the Egyptian Capital Market Association (ECMA), said that Misr for Central Clearing, Depository and Registry (MCDR) is the party responsible for collecting the taxes. This follows the parliamentary decision to exempt same-day transactions from stamp duty and re-imposing it on residents at 0.5 per thousand.
He added that the stamp duty exemption on the day trading would activate the operations of (T + 0). Maher added that the market should go beyond this, particularly for the long-term investor whose attraction requires a full tax exemption.