Egypt's new tax on stock transactions will spook investors

Officials at Egypt’s stock exchange have criticised a recent government decision to impose a 0.001 percent levy on investor trades, arguing that it will discourage traders, Ahram's Arabic website reported on Tuesday. On Monday, the government unveiled its modified economic reform programme, of which the new tax is a part. The programme will be presented to the International Monetary Fund to obtain a long-awaited $4.8 billion loan. The Egyptian bourse will not be able to attract more foreign investment under this new tax, Ahram quoted head of the Egyptian bourse Mohamed Omran as saying. Omran said that few other countries have a policy of taxing their stock markets, and they exempt foreign investors. In November the Cabinet approved implementation of a capital gains tax, which stands at 10 percent on any initial public offering in the stock exchange. Hisham Tawfik, member of the bourse’s board of directors, said that he expected that around 20,000 investors of a total of 70,000 would leave the Egyptian stock market within days if the tax was implemented. Tawfik told Al-Ahram that, in his view, the government treats the bourse in the same way it treats alcohol and luxury commodities. From : Ahram Online