The Finance Ministry is preparing to roll out a sweeping package of 49 tax and customs reforms designed to catalyze capital markets and drive both foreign direct investment and portfolio inflows, five government sources tell EnterpriseAM. Set to take effect in the upcoming fiscal year, the package represents a fundamental pivot toward a more predictable and investment-friendly fiscal framework, we were told.

Why it matters: The government aims to boost tax revenues by 1-2% of GDP within three years by expanding the tax base rather than hiking rates, our sources tell us. The goal is to raise the tax-to-GDP ratio to 15-16%, bringing Egypt in line with middle-income peer averages from its current position of 12.5%.

Included in the package is a plan to overhaul the tax treatment of gains on unlisted shares during acquisitions to better reflect long-term acquisition costs. The new mechanism will calculate taxable gains as the difference between the current share price and the purchase price after deducting the impact of accumulated inflation over the holding period. The move is intended to incentivize investors to retain assets for longer periods and curb short-term speculation, a senior government official tells us.

The ministry also plans to unify the tax treatment for listed and unlisted shares by equalizing stamp duty across both while maintaining incentives for companies to list on the EGX to broaden the investor base, according to the sources.

The government is doubling down on its plan to introduce a 0.125% stamp tax on EGX transactions, which will apply to both buyers and sellers, whether they are residents or not. The mechanism is expected to bridge the EGP 10 bn revenue gap left by the state’s original capital gains tax projections, we were told.

Included in the 49 reforms are tax exemptions for real estate, gold, silver, and metals investment funds, in a move aimed at supporting the growth of these vehicles and deepening the market.

To address double taxation concerns, the ministry is set to overhaul the withholding tax regime to fast-track refunds, capping the repayment period at no more than 45 days.

Under the plan, the tax dispute settlement act will be extended through May, with the possibility of a one-time ministerial extension to clear backlogs and improve voluntary compliance, according to one of the sources.

What’s next? The government is preparing to submit the package of tax and legislative reforms to the parliament next week, paving the way for approval and implementation between May and June, our sources said.

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