Egypt to exempt bonus shares from new capital gains tax -minister

Reuters Middle East

(Refiles to change dateline to Cairo)

CAIRO, May 30 (Reuters) - Egypt will exempt bonus shares from a new 10 percent capital gains tax on profits made on the stock market, the country's Finance Minister Hany Dimian said.

On Thursday Dimian said Egypt had approved the introduction of the tax, part of the first phase of income tax reforms it expects to bring in 10 billion Egyptian pounds ($1.4 billion).

"Distributions of bonus shares will be exempt from the taxes," Dimian told Reuters by phone late on Thursday after a meeting with government finance officials.

Profits from the stock market are currently tax free, and Dimian has said the new tax will not be retroactive.

Egypt is eager to encourage investment but is also trying to find additional revenue sources after more than three years of economic and political turmoil since a popular uprising toppled President Hosni Mubarak in 2011.

Abdel Fattah al-Sisi, the former army chief who toppled the country's first freely-elected leader after protests last year, won a presidential election with more than 90 percent of the vote this week, according to provisional results.

(Reporting by Ehab Farouk; Writing by Alexander Dziadosz; editing by Susan Thomas)

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