Tax Authority drove traders to panic for requesting payment of capital gains taxes

Wednesday 01 August 2018 06:25 PM

Ihab El-Saed
Ihab El-Saed

By Ahmed Aly

Egyptian Tax Authority requested traders at the Egyptian Stock Exchange to pay capital gains taxes before a deferment became effective in May 2015 as well as dividends taxes which have not been deferred since 2014.
" Traders were requested via brokerage firms to pay the taxes due for the period extending from July 2014 to May 17, 2015," said EGX board member Ihab El-Sayed.
Egypt's Ministerial Cabinet, chaired by Eng. Ibrahim Mehleb, decided  back in July 2014 to impose a 10% tax on both capital gains and  dividends. Later on on May 2015, the Cabinet decided to defer the capital gains tax for two years, then on May 2017 it decided to defer the tax for a three-year period expiring on May 17, 2020.
In statements delivered exclusively to Al-Mal newspaper, El-Sayed said that ETA's latest requests drove traders to panic fearing that capital gains tax is applicable at the time being contrary to deferrals.
 Stopping short deferring capital gains tax retroactively is erroneous, creating uncertainty and confusion, he added.
Investors with less than 25% stake at any listed companies is required to pay 10% of distributed dividends, and 5% for investors with more than 25% stake, while Misr For Central Clearing, Depository & Registry deducts promptly  1% of tax amount for the two brackets.