Egypt’s House of Representatives has approved key amendments to the stamp tax law governing stock market transactions, introducing a revised framework designed to increase trading volumes and deepen the country’s capital markets. The new rules aim to strike a balance between generating government revenue and stimulating activity on the Egyptian Exchange (EGX).
Quick Facts
- Intraday trading tax cut to 0.25 per thousand.
- Listed investment funds are now fully tax-exempt.
- Aims to increase liquidity on the Egyptian Exchange.
A Closer Look at the New Tax Structure
Under the updated regulations, a stamp tax of 0.5 per thousand will be applied to both the buyer and seller for transactions involving listed securities.
However, in a direct move to encourage higher trading frequency and market liquidity, the tax for intraday trades—where securities are bought and sold within the same trading session—has been halved to 0.25 per thousand for both parties. This reduction significantly lowers the cost for active traders and market makers.
Solving Double Taxation and Boosting Investment Funds
A critical component of the reform is the complete exemption of listed investment fund certificates from the stamp tax. This change addresses a long-standing issue of double taxation, where investment funds were taxed as corporate entities, and investors were taxed again upon trading the fund’s certificates.
By removing this second layer of tax, policymakers are making professionally managed investment products more attractive. The move is expected to support the growth of Egypt’s asset management industry and encourage more retail investors to access diversified portfolios through listed funds.
Strengthening Egypt’s Capital Markets
These tax amendments are part of a broader government strategy to enhance the role and depth of Egypt’s capital markets. By lowering transaction costs and removing structural impediments like double taxation, the government is signaling strong support for increasing participation from both individual and institutional investors.
Market observers anticipate that the new rules will lead to increased trading activity and greater liquidity on the EGX, positioning the stock market as a more effective engine for capital formation and investment in the country.
About The Egyptian Exchange (EGX)
The Egyptian Exchange (EGX) is the country’s main stock exchange, providing a regulated marketplace for the trading of securities. It plays a vital role in Egypt’s economy by facilitating capital formation and investment for listed companies.
Source: Jawlah
