By Mohammed Ayyad
Finance Minister Hany Kadry Dimian has announced that government-imposed tax on capital gains and monetary dividends earned on the stock market is “final and irreversible”, despite strong pressure from investors.
Speaking on the sidelines of a press conference on Saturday held by Prime Minister Ibrahim Mehleb and the ministerial economic group, Dimian added: “The government agenda does not include a proposal to impose a tax similar to the stock market tax on the savings vehicles of banks, as financial market investors have demanded.”
Dimian continued: “The draft law for the stock market tax is finished, with the cabinet finalising wording before the draft is sent to President Adly Mansour by Sunday evening.”
Dimian estimates that proceeds to the treasury from the new tax will range from EGP 5 – EGP 6bn, but this will be linked to market performance. It will be collected annually from Egyptians according to net profits earned, with taxes collected from foreigners each time profits are earned.
“The safety of the economy shook under the pressure of political and security-related turmoil, and we are now seeking to restore confidence through legislative reforms and an improved environment for doing business, whether in terms of land reform,” better energy supplies, or otherwise, these measures will interest investors, said Dimian. “The imposition of a tax will not fear investors as long as it comes as part of larger systematic reform efforts that maximize their profits.”
The minister noted that, alongside lower reliance on foreign aid, there will be no economic reform without social protections, and no social policy measures without economic measures for funding social protection programmes.