{"id":555447,"date":"2021-11-15T04:01:09","date_gmt":"2021-11-15T04:01:09","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2021\/11\/15\/the-jury-is-out-on-the-tax-fee-incentives-on-the-egx\/"},"modified":"2021-11-15T04:01:09","modified_gmt":"2021-11-15T04:01:09","slug":"the-jury-is-out-on-the-tax-fee-incentives-on-the-egx","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2021\/11\/15\/the-jury-is-out-on-the-tax-fee-incentives-on-the-egx\/","title":{"rendered":"The jury is out on the tax + fee incentives on the EGX"},"content":{"rendered":"

<\/a> Market watchers have welcomed a <\/strong>basket of EGX-centric tax incentives<\/a><\/strong>and fee cuts<\/a><\/strong> unveiled last week, but they want specifics <\/strong>\u2014 and they\u2019re still not entirely sold on the idea that the incentives will allow domestic investors to swallow the 10% capital gains tax<\/a> on EGX trades due to come into effect in January 2022.<\/p>\n

Okay, before we move on, you need to remember one thing: This story is all about the psychology of domestic investors<\/strong> (retail and institutional) \u2014 folks who are resident in Egypt for tax purposes. Local investors (retail in particular) have been driving trading on the EGX since foreign institutional investors left the market in the early days of the pandemic. As non-residents, foreign investors are exempt from the capital gains tax here.<\/p>\n

We\u2019ve been picking up plenty of chatter that foreign investors are rediscovering their appetite for Egyptian equities<\/strong>, with folks on the buy side lining up conference calls with local issuers \u2014 and doing in-person visits and small roadshows to Egypt for the first time since February 2020.<\/p>\n

Market reaction to the basket of tax and fee cuts has been muted <\/strong>(the EGX is up just 1.6% in the two sessions since the announcement) for two reasons:<\/strong><\/p>\n