The Egyptian Ministry of Finance is targeting the collection of 845 million EGP from the stamp tax imposed on stock market activities during the next fiscal year, compared to 722 million EGP that was targeted in the current fiscal year. This was stated in the analytical report of the 2026-2027 budget project.
According to government sources speaking to the "Stock Exchange" website, the stamp tax rate is expected to range between 0.1% and 0.115%, equivalent to 1 to 1.15 per thousand. This tax will be applied to the total value of each sale or purchase of listed securities, regardless of whether a profit or loss is realized.
Details of the Initiative
The new mechanism will encompass all investors, both residents and non-residents, reflecting the government's intention to broaden the tax revenue base. Hani Qazman, the executive partner at "Qazman & Partners," confirmed that replacing the capital gains tax with the stamp tax represents an important reform step aimed at simplifying the tax system and stimulating investment.
Qazman noted that this shift opens up new investment opportunities, as it reduces the accounting challenges associated with calculating capital gains and limits tax disputes. This development is expected to enhance the confidence of both local and foreign investors, contributing to improved market liquidity and increased trading rates.
Background & Context
This initiative comes amid the economic challenges facing Egypt, where the government seeks to boost public revenues and improve the investment climate. The stamp tax was previously implemented but was replaced by the capital gains tax, which faced difficulties in application.
The Ministry of Finance aims to strike a balance between stimulating economic activity and enhancing the efficiency and fairness of the tax system, reflecting global trends in improving the business environment.
Impact & Consequences
The stamp tax is expected to influence trading patterns in the market, particularly short-term strategies, due to the cost being linked to the volume of transactions. However, the clarity of the tax cost and ease of collection may attract institutional investments.
Experts emphasize that maintaining low and well-considered tax rates will be essential to maximizing the benefits of this approach, thereby enhancing the competitiveness of the Egyptian market at the regional level.
Regional Significance
This step is part of broader efforts to improve the investment environment in the Arab region, where many countries are striving to attract foreign investments and boost economic growth. Egypt's experience in implementing the stamp tax could serve as a model for other countries.
In conclusion, these measures represent a step towards improving the tax system and enhancing confidence in the Egyptian financial market, which may contribute to attracting more investments in the future.