CAIRO (Reuters) – The head of Egypt’s stock exchange said on Wednesday the decision to extend the suspension of capital gains tax on shares will attract investment and boost IPOs in the market.
Egypt’s Supreme Investment Council opted on Tuesday to prolong for three years a freeze of a 10 percent tax on gains from shares first imposed in July 2014 as part of moves to replenish depleted state coffers.
Egyptian blue chip shares rose on Wednesday, bucking a downtrend among emerging markets, after the government approved 17 steps designed to boost investment including the extension of the tax suspension. [nL8N1D32FB]
“The decision was a surprise to the market and everyone … but a pleasant surprise … The tax had a negative impact,” stock exchange chief Mohamed Omran said in an interview.
“The decision will help ensure the success of future offerings in the market, whether governmental or private offerings,” he told Reuters.
Egypt has been striving to entice investment to restore growth since a popular uprising in 2011 that ushered in protracted political turmoil and scared away tourists and foreign investors – its main sources of hard currency.
The investment council, set up by President Abdel Fattah al-Sisi last month, approved 17 stimulative measures including wide-ranging tax exemptions for farmers and manufacturers who produce strategic crops or goods that Egypt imports or exports.
(Reporting by Ehab Farouk; writing by Amina Ismail; editing by Mark Heinrich)