Egypt to apply capital gains tax starting 2025

Doaa A.Moneim , Thursday 2 May 2024

Egypt has decided to apply the capital gains tax on shares and stakes listed in the Egyptian Stock Exchange (EGX) starting from the tax season of March/April 2025, through the Egyptian Clearing Company for 2024, the cabinet announced on Wednesday.

capital gains tax meeting


Capital gains tax is a tax imposed on the profits realized from certain assets' sale or disposal, including securities traded in the stock exchange market.

The specific capital gains tax rates and regulations can vary between countries.

The decision was announced following a meeting held by Prime Minister Mostafa Madbouly at the government headquarters in the New Administrative Capital to discuss ways to develop the stock market.

Cabinet Spokesperson Mohamed El-Homosany explained that the decision came against the backdrop of the non-issuance of the executive regulations of Law No. 30 of 2023 that governs the income tax has not been released as of yet; the absence of the procedures necessary for calculating and collecting the tax; and the need for further clarification on these procedures through the Egyptian Clearing Company.

He also stated that the Ministry of Finance is tasked with taking the necessary legal measures to waive the tax due from the issuing date of Law No. 30 of 2023 until the end of the calendar year on 31 December 2023.

The Egyptian Tax Authority, in collaboration with the Egyptian Clearing Company, will establish the necessary procedures for calculating and collecting tax for 2024.

EGX witnessed a drop in the market cap during April, declining to about EGP 1.7 trillion, down from EGP 1.8 trillion reached in March.

The exchange value also fell in April to EGP 1.5 trillion, down from EGP 2.1 trillion posted in March.

Under its Initial Public Offering (IPO) programme, Egypt targets floating stakes in a group of state-owned assets on the EGX to raise the private sector presence in the country’s economy, including through investing in EGX.

Egypt targets general revenues of EGP 2.6 trillion in the upcoming fiscal year (FY) 2024/2025, which starts 1 July, with a 22.5 percent growth, compared to EGP 2.1 trillion estimated for the current FY2023/2024.

Tax revenues are set to grow by 32.1 percent in FY2024/2025 to post over EGP 2 trillion, up from an estimated EGP 1.5 trillion in FY2023/2024. If the next fiscal year’s target is achieved, it will be the highest in almost seven years.

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