Private equity funds may get tax exemption

Gov’t considers an income tax exemption for private equity funds: The Finance Ministry is working with the Financial Regulatory Authority to finalize a draft of legislative amendments that would exempt private equity funds, including the Sovereign Fund of Egypt and gold funds, from the 22.5% income tax, a senior government source told EnterpriseAM. This aims to revitalize the capital market and attract more market capitalization.

These amendments will be implemented alongside the stamp tax on EGX transactions, which replaces the previously planned capital gains tax, our source said.

Gov’t eyes corporate dividend tax reduction: The tax on divided distributions from investments in other funds is also being looked into. The tax on dividends for corporate entities will be reduced from 15% to 10%, while the 5% tax rate on divided distributions for individuals will remain unchanged, the source noted.

IPOs will be fully exempt under the planned amendments, in efforts to boost IPO offerings in the local market, our source noted.

The government is aiming to raise some EGP 2.6 tn in tax revenues this fiscal year through implementing existing tax facilitation laws and introducing new facilities on customs and real estate taxation — all without imposing additional tax burdens, Finance Minister Ahmed Kouchouk said in his budget statement to the House in April.