Egypt's Finance Minister Amr El-Garhy attends a news conference in Cairo, Egypt August 11, 2016. Picture taken August 11, 2016. REUTERS/Mohamed Abd El Ghany
Egyptian Finance Minister Amr al-Garhy will propose a stamp duty on stock market transactions on buyers and sellers starting at 1.25Egyptian pounds ($0.0774) per 1,000 to the government next week, he told Reuters on Wednesday.
The tax would go up to 1.5 pounds per 1,000 in the second year of its implementation and 1.75 pounds in its third.
"We will propose next week to the cabinet that the stamp duty comes in steps," Garhy told Reuters.
Egypt imposed a stamp duty on buyers and sellers in May 2013, collecting more than 350 million Egyptian pounds ($18.77 million) in revenue before the levy was replaced in July 2014 by a 10 percent capital gains tax.
It suspended the capital gains tax in May 2015 for two years, under pressure from investors. They said it was discouraging business just as Egypt was struggling to recover from a plunge in confidence after a 2011 uprising and subsequent political upheaval.
The Higher Investment Council last year extended the suspension of capital gains tax for three years, until 2020 as part of efforts to draw investors back.
"We are working on not affecting the size or value of transactions in the market," Garhy said of the decision to bring the tax about in steps. A senior ministry official had told Reuters on Thursday that the ministry would propose a tax of 2 pounds per 1,000.
The proposed tax would have to be approved by the cabinet of ministers before being sent to parliament for a vote.
($1 = 16.1500 Egyptian pounds)