Dr. Mustafa Madbouli, Egyptian Prime Minister, held meetings yesterday to discuss means of supporting the Egyptian Capital Market and improve the investment and business environment, in the presence of Dr. Mohammed Mait, Minister of Finance, Hisham Tawfiq, Minister of Public Enterprise Sector, Ahmed Koushouk, Vice Minister of Finance for Fiscal Policy, Advisor Mohamed Abdel Wahab, CEO of the General Authority for Investments, Dr. Mohammed Omran, Chairman of the Financial Regulatory Authority (FRA), Dr. Mohammed Farid, Executive Chairman of the Egyptian Exchange (EGX), Shirin Sharqawi, Assistant Minister of Finance, Ahmed Samir, Head of the Economic Committee at the Egyptian parliament, Dr. Hani Sari Eldine, Head of the Economic Affairs committee at the Egyptian Senate, Alaa Amer, Chairman of Misr for Central Clearing, Depository and Registry (MCDR), Karim Awad, EFG Hermes, Ahmed Abu Al‐Saad, Head of Egyptian CFA Association, Mohammed Maher, Head of the Egyptian Capital Market Association, and Saleh Nasser, representative of the Egyptian Society of Technical Analysts.
During the meeting, Dr. Mustafa Madbouli stressed the importance of providing a stimulus package to support the Egyptian Capital Market and improve the investment and business environment, directing in this regard to reducing the trading fees of EGX, FRA, MCDR and investment protection fund and the establishment of a special unit GAFI to provide a fast track for potential companies to list on EGX.
Ambassador Nader Saad, spokesman for the Prime Minister's Office, said that the coordination between all parties; Ministry of Finance, The Egyptian Exchange (EGX), Financial Regulatory Authority (FRA), and market participants, that resulted in incentives package that will contribute in supporting the development and competitiveness of the Egyptian capital market, and help thereby improve the market's position in global indicators and thereby increasing its ability to attract new foreign investments.
He added that the incentives package would contribute to supporting the capabilities and competitiveness of the Egyptian Capital Market, and support its development to play a detrimental role in supporting economic and social development plans, thus improving the market's position in global indicators, and increasing its ability to attract more foreign investment.
Nader Saad pointed out that the meetings held in this regard witnessed flexibility and consensus from all parties. The Ministry of Finance responded to the demands presented by EGX on behalf of the various market parties, in relation to the application of the tax on capital gains, which included the elimination of stamp tax on capital market trades for resident investors to ensure fairness in the case of loss, deduction of all expenses related to trading and preservation of shares and other The tax base. In addition, an incentive is calculated for funds invested on EGX and deducted from the tax base in the event of profits, which will contribute to maximizing the return of investors and achieving justice among the various savings vessels.
In addition to calculating profit by comparing the acquisition price or the closing price of the shares before the beginning of the application whichever is higher than the selling price to increase the returns of investors, reduce the tax on profit achieved in the new proposals by 50% the first two years of the law, and postpone the payment of tax until the realization of the cash sale in stock swaps when the acquiring party is restricted to EGX, encouraging restricted companies to acquire unrestricted companies and create large entities to help grow the market. Ambassador Nader Saad added that it was agreed that no tax will be applied for individual investors in EGX, and the clearing will calculate and collect tax after deducting all expenses requested to be entered and motivated at the end of each year and on the total transactions of the investment portfolio, with the adoption of the method of proposals through capital increases as an unconsented fact of tax.
It was also agreed to reduce the tax rate on individual investors through equity funds to 5% on realized profit, exempt equity investment funds from all stock taxes, assign the fund to calculate and supply them without opening tax files to investors in documents, stimulate venture capital investment funds through exemptions for their transactions in unrestricted shares of startups and reduce the tax to document holders to 5% in the event of profits.
