Egypt’s Second Tax Relief Package: What Are the Key Amendments?#
Egypt continues to develop its tax system through a new package of measures designed to reduce tax burdens on businesses, enhance investment attractiveness, and improve the relationship between taxpayers and the tax administration.
The second package includes amendments related to Income Tax Law No. 91 of 2005 and Stamp Tax Law No. 111 of 1980, with particular attention to stock market investment, the tax treatment of certain transactions, and reducing instances of double taxation.
According to announcements by the Egyptian Tax Authority on August 3, 2026, the measures include an exemption from income tax on capital gains arising from the disposal of listed securities, while transactions remain subject to proportional stamp tax in accordance with the applicable rules. The package also includes a stamp tax exemption for market-making activities.
These measures reflect an approach that uses tax policy not only to generate public revenue but also to support investment and improve the efficiency of financial markets.
1. Capital Gains Tax Exemption on Listed Securities#
One of the key announced measures is the exemption from income tax on capital gains arising from the disposal of securities listed on the Egyptian Exchange, while the relevant transactions remain subject to proportional stamp tax under the applicable legislation.
This amendment changes the tax treatment of gains generated from trading listed securities and may influence how investors assess the expected returns on equity investments.
From an economic perspective, reducing the tax burden on capital gains may enhance the attractiveness of stock market investments, particularly for investors who consider tax liabilities when comparing different investment opportunities.
However, the actual impact will depend on several factors, including the performance of listed companies, market liquidity, investor expectations, and the stability of the regulatory framework governing securities trading.
2. Addressing Double Taxation in Securities Transactions#
Double taxation is an important concern for investors and businesses because applying multiple tax burdens to the same economic transaction can increase the overall cost of investment.
In this context, the announced amendments seek to address double taxation associated with certain securities transactions and dividend distributions.
The Egyptian Tax Authority has also indicated that transactions involving unlisted securities will be excluded from stamp tax, with income tax remaining applicable under the prescribed legal treatment.
This approach may provide investors with greater clarity when calculating their tax obligations, helping them assess investment costs and make more informed financial decisions.
The practical benefits, however, depend on the precise wording of the legislation and the conditions governing each type of transaction.
3. Stamp Tax Exemption for Market-Making Activities#
The announced measures include a stamp tax exemption for market-making activities, recognizing the role these activities can play in supporting trading and liquidity in the stock market.
A market maker is an entity that operates under applicable market regulations to help maintain buy and sell quotations, facilitating transactions and supporting market liquidity.
From an economic perspective, reducing the tax burden associated with these activities may encourage greater participation in market-making and potentially improve trading efficiency in the relevant securities.
Nevertheless, achieving these outcomes also depends on other factors, including the regulatory environment, investor participation, market infrastructure, and the financial performance of listed companies.
4. How Can Businesses Benefit from the Tax Amendments?#
The potential implications of tax relief extend beyond stock market investors to companies considering capital raising, expansion, or changes to their financing strategies.
For some businesses, the amendments may make it worthwhile to reassess the potential benefits of listing on the Egyptian Exchange, particularly when comparing bank financing with raising capital through an equity offering.
Tax treatment can influence the overall cost of financing. However, a listing decision should not be based on tax considerations alone. Companies must also evaluate their size, disclosure and corporate governance obligations, ongoing compliance costs, and readiness to accommodate new shareholders.
Businesses should therefore treat tax incentives as one component of financial planning rather than as the sole justification for an investment or financing decision.
5. What Should Finance and Accounting Departments Review?#
Tax amendments make it important for businesses and investors to review their accounting procedures and financial processes for transactions affected by the new rules.
Key practical steps include:
Reviewing the tax treatment of gains arising from the disposal of listed and unlisted securities.
Confirming the scope of exemptions and eligibility requirements under the applicable legislation and implementing decisions.
Reviewing how proportional stamp tax is calculated on transactions that remain taxable.
Updating accounting procedures and financial forecasts to reflect the applicable tax treatment.
Assessing the potential effect of the amendments on investment and financing decisions without assuming tax savings before confirming eligibility.
These measures can help reduce the risk of incorrect tax treatment and provide finance teams with a clearer basis for preparing budgets, evaluating investments, and managing tax compliance.
Are Tax Incentives Enough to Stimulate Investment?#
Although tax relief can play an important role in supporting investment, its overall effectiveness depends on several interconnected factors.
Investors consider tax rates, but they also assess economic policy stability, access to financing, borrowing costs, inflation, regulatory clarity, and the ability of businesses to achieve sustainable growth.
Tax incentives can therefore contribute to a more attractive investment environment, but they do not automatically guarantee higher trading volumes or increased investment inflows.
The success of the package will ultimately depend on how the measures affect business decisions, actual investment activity, stock market efficiency, and the ease with which taxpayers can apply the new rules.
Conclusion#
Egypt’s second tax relief package represents an important development in the tax treatment of certain investment transactions, particularly those involving listed and unlisted securities and market-making activities.
The announced measures provide businesses and investors with an opportunity to reassess selected financial and investment decisions. However, the benefits available to each taxpayer depend on the precise legal provisions, eligibility conditions, and treatment of individual transactions.
For businesses, the priority should not be limited to monitoring legislative developments. Instead, companies should translate these changes into practical reviews of their financing strategies, investment plans, and tax obligations to improve financial decision-making and reduce compliance risks.
