Egypt’s longer suspension of capital gains tax will spur more investment

CAIRO (Reuters) – The head of Egypt’s stock exchange said on Wednesday the decision to extend the suspension of capital gains tax on shares will attract investment and boost IPOs in the market.

Egypt’s Supreme Investment Council opted on Tuesday to prolong for three years a freeze of a 10 percent tax on gains from shares first imposed in July 2014 as part of moves to replenish depleted state coffers.

Egyptian blue chip shares rose on Wednesday, bucking a downtrend among emerging markets, after the government approved 17 steps designed to boost investment including the extension of the tax suspension. [nL8N1D32FB]

“The decision was a surprise to the market and everyone … but a pleasant surprise … The tax had a negative impact,” stock exchange chief Mohamed Omran said in an interview.