Egyptian tax experts say new incentives package will support stock market listings

Egyptian tax experts say a new package of tax facilitation measures could help attract more companies to the stock exchange, strengthen liquidity, and improve the investment climate in capital markets.

Ashraf Abdel Ghani

Founder of the Egyptian Tax Experts Association says the proposed incentives package could improve market liquidity, encourage major companies to list on the Egyptian stock exchange, and strengthen investor confidence.

The Egyptian Tax Experts Association said the second package of tax facilitation measures, expected to be fully announced within days, will include three major tax incentives aimed at encouraging large companies to list on the Egyptian stock exchange.

According to the association, the measures are designed to strengthen market liquidity, improve stability in the capital market, and reduce obstacles that discourage major companies from pursuing public listings.

Ashraf Abdel Ghani, founder of the Egyptian Tax Experts Association, said the stock market represents a key pillar of the national economy by providing financing channels for companies through stock and bond offerings.

He noted that the stock exchange also creates investment opportunities while daily market indicators reflect the state of investment activity and the performance of various economic sectors.

Proposed cancellation of capital gains tax

Abdel Ghani said the second tax incentives package includes a set of legislative and executive measures aimed at creating a more attractive investment environment.

Among the proposed measures is the cancellation of the capital gains tax on listed securities, which has been postponed five times over the past 11 years due to implementation challenges and concerns over its impact on market liquidity.

He said the tax had contributed to investors shifting toward bank savings, gold speculation, and foreign currency investments.

The package proposes replacing the capital gains tax with a proportional stamp duty tax to encourage trading activity and reduce the tax burden on investors.

Although some investors refer to stamp duty taxes as a “blind tax” because they are applied in both profit and loss scenarios, supporters argue the system is easier to implement and less disruptive to trading volumes.

Tax incentives for newly listed companies

The proposed package also includes tax incentives for newly listed companies for a period of three years, in coordination with the Financial Regulatory Authority.

According to Abdel Ghani, these incentives could be extended for an additional three years if companies achieve measurable growth indicators, expansion targets, and increased investment spending.

He also called for establishing clearer rules governing acquisition cost calculations used in determining capital gains taxes on unlisted shares and securities transactions.

In addition, Abdel Ghani stressed the importance of maintaining permanent incentives for listed companies given their higher disclosure standards and stronger financial reporting obligations, arguing that such measures would help increase voluntary tax compliance.