By: Mahmoud Salah Eldin

Cairo - Mubasher: Negotiations are speeding up in the Egyptian financial market regarding the stamp duty tax which is set to be applied on the capital market.

The financial stocks department of the Federation of the Egyptian Chambers of Commerce (FEDCOC) will meet on Tuesday with the chairman of the Egyptian Exchange (EGX), Mohamed Omran, to discuss the awaited tax and to make a final recommendation to the Ministry of Finance, the head of the department, Awni Abd El-Aziz, told Mubasher.

The Ministry of Finance seeks to impost the stamp duty at 0.004% or 0.005% on the stock market trade.

Abd El-Aziz added that the EGX, listed companies, as well as the Egyptian Financial Supervisory Authority (EFSA) do not have the power to make the decision, yet they can recommend amendments to the draft law before it is referred to the Egyptian Parliament for approval.

Omran previously said that he sent a letter in that regard to the minister of finance last week.

The EGX chairman refused to reveal the details of the letter, but a source in the ministry told Mubasher that the EGX presented a note concerning the cons of applying the stamp duty tax on the capital market in the current period, suggesting that it should not exceed 0.001%.

Imposing the duty at a bigger rate will negatively affect liquidity, which could fail the expected governmental initial public offerings (IPOs), it indicated.

The chairman of the EFSA, Sherif Samy, said that lately there have been talks with the finance ministry regarding the tax, but the EFSA did not suggest a specific rate.

All considerations were presented, Samy added, noting that the tax should be accepted by investors, and should come at a reasonable ratio.

Translated by: Moslem Ali