Egypt imposes 10 pct tax on capital gains, dividends - statement

Tuesday 01-07-2014 06:25 PM
Egypt imposes 10 pct tax on capital gains, dividends - statement

An employee counts money at a bank in Cairo February 20, 2011. REUTERS/Suhaib Salem


(Reuters) - Egypt's president approved a law on Tuesday imposing a new 10 percent tax on capital gains and stock dividends as the country seeks to rebalance public finances and revive an economy battered by over three years of political turmoil.

The tax applies to dividends and capital gains made from trading stocks on the Egyptian stock market as well as unlisted companies.

"(This) comes in response to the major challenges which the Egyptian economy has faced which demand coordination of all efforts to protect and rebuild confidence in it," a statement from the presidency said.

Egypt, which has relied heavily on aid from Gulf Arab allies in the past year, needs to implement broad economic reforms in order to revive its economy, which saw a drop in foreign investment and tourism after the 2011 uprising.

New President Abdel Fattah al-Sisi signed the law after passing a budget this week for the 2014/15 fiscal year that seeks to reduce the deficit to 10 percent of gross domestic product by curbing spending on energy subsidies.

The statement said the capital gains tax can be reduced to 5 percent in certain circumstances, including if the taxpayer owns 25 percent or more of the company.

It was not immediately clear when the new measures would take effect. (Reporting By Nadia El-Gowely and Ehab Farouk; Writing by Stephen Kalin, editing by John Stonestreet and Hugh Lawson)

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