New tax bill heads to House ahead of July rollout

The new tax package is en route to the House of Representatives ahead of a planned July rollout, killing the controversial capital gains tax, restructuring VAT for key industries, and taxing white cement for the first time, a government official tells EnterpriseAM.

Goodbye CGT, hello stamp tax. The draft law cancels the capital gains tax and explicitly drops previous tax claims on listed companies for that period to lure heavyweights back to the market. In its place: a tiered stamp tax of 0.05% on market makers and blue-chip stocks, and 0.1% on all other shares.

Newly listed companies also get a three-year corporate income tax incentive — 30% in year one, 20% in year two, 10% in year three — formally cementing a scheme we heard about in March.

Why it matters: The structure is designed to “encourage major companies to list on the exchange and provide an advantage for large stocks to support the Egyptian bourse,” our source tells us. It deepens liquidity in blue-chip names, makes the bourse more stable, and gives big-ticket companies one less reason to stay private.

BACKGROUND- The government has been circling a stamp tax as a cleaner CGT replacement since at least 2024, with the plan gaining detail earlier this year. The 0.1% rate isn't new either — we reported last June the government was looking to land there for both buyers and sellers, down from an earlier 0.125% proposal.

Shaking up the VAT: Detergents move out of the 5% schedule bracket into the standard 14% rate, letting manufacturers deduct input tax against general liabilities — similar to recent adjustments for contracting. State revenues from the item are projected to more than double, from EGP 1 bn to EGP 2.3 bn, our source tells us.

Also on the VAT front: The legislation introduces a direct exemption for transit goods and related services to stimulate the country's broader ambitions of becoming a regional transit trade hub.

AND- White cement is getting taxed for the first time. A flat EGP 35 per ton state development fee now applies across all cement types, ending the carve-out that limited the levy to black cement. Total development fee revenues from the sector are expected to rise to EGP 7.7 bn from EGP 2.9 bn, our source says.

Medical devices catch a break. VAT drops to 5% from 14%, with a full exemption for dialysis and kidney filter inputs and a four-year VAT suspension on machinery and medical equipment. Foreign passenger departure fees will be set at EGP 50-100 across Egypt's airports.

Compliant taxpayers get a clearer lane. The draft codifies the "white list" and the Tamayoz card, building on FinMin’s push to reward compliant taxpayers with faster treatment. Companies can also get a temporary tax card valid for four months to speed up incorporation.