Newly-listed companies could soon enjoy a three-year exemption from taxes on income from IPOing under a set of incentives to encourage trading activity and IPOs on the EGX that is currently being studied by the Finance Ministry and the Financial Regulatory Authority, a government source told EnterpriseAM. The soon-to-be announced incentives will be put into law during 1H 2026 as part of the recently unveiled second package of tax facilities after the proposals get the necessary regulatory approvals, we were told.

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The exemption will be tied to achieving quantifiable performance indicators, including trading volumes, capex, and expansion plans. Companies may also qualify for another three years of the exemption, based on growth and other indicators.

This will help ensure companies are not taking advantage of the tax break: When we sat down with CI Capital’s CEO of the sell-side investment bank Amr Helal he mentioned the importance of a more balanced approach when it comes to listing incentives that reward genuine participation rather than opportunistic listings. Helal told us the finance minister’s push to incentivize listings could be the catalyst Egypt’s equity market needs, cautioning that the design of those incentives will determine whether the coming IPO wave will be sustainable.

The proposals also include an exemption from tax on gains for holding companies arising from sales of stakes in Egyptian subsidiaries under certain conditions, as well as from income generated from the sale of unlisted shares.

That’s not all: Last week, while announcing the second package of facilities, Finance Minister Ahmed Kouchouk said the government is moving to replace the capital gains tax with a stamp duty to encourage institutional investment in the EGX.

The package will also include:

  • Legislative amendment to introduce a minimum threshold for debt that can be written off without lengthy legal procedures;
  • Regulations allowing taxpayers to reclaim their credit balances directly based on the tax return, ensuring better liquidity for taxpayers;
  • Unifying administrative seizure procedures and the mechanisms for lifting them in a bid to streamline processes and reduce the burdens faced by taxpayers due to inconsistent practices across different tax offices.

The ministry is also working on a set of regulatory measures to tackle the growing problem of shell companies, which lead to tax invoices discrepancies, undermined tax fairness, and curbed overall compliance, according to our source.

The package will also include a cabinet decision requiring all state entities to conduct their transactions only through the corporate tax card system, a move that is expected to boost tax registration and expand the taxpayer base. Targeted entities include water, electricity, and natural gas companies.

REMEMBER- This is package two of four: The first package came with the aim of building trust between taxpayers and the tax authority, and the second to incentivize tax compliance. Meanwhile, the third package will focus on addressing distortions in tax laws and procedures and will introduce a new internal mechanism for dispute resolution, a step expected to reduce the need for future dispute settlement laws and minimize reliance on arbitration or prolonged litigation. The fourth package will focus on strengthening tax enforcement measures. It will include decisive actions to address violations within the informal economy and ensure the integrity of the tax system.

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