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Egypt stock market plunges as new taxes are imposed

A man counts Egyptian pounds at currency exchange shop in downtown Cairo on 3 November 2016 [KHALED DESOUKI/AFP/Getty Images]
A man counts Egyptian pounds at currency exchange shop in downtown Cairo on 3 November 2016 [KHALED DESOUKI/AFP/Getty Images]

The Egyptian Ministry of Finance's decision to impose capital gains taxes on shares on the local stock market has increased losses, experts warned yesterday.

The country's local stock market took a dive on Monday after the ministry said taxes would need to be paid on capital gains made from disposing securities, shares, and treasury bills, as well as stamp taxes related to trading on securities in the stock market.

Following the announcement, local media reported that the stock market had recorded a total of more than 27 billion Egyptian pounds ($1.7 billion) in losses.

The decision stipulated that a ten per cent tax would apply by early next year on net profits of dealing in securities listed on the stock exchange.

Analysts have warned of the "negative repercussions on the stock market" following the decision. They predicted that individual Egyptian investors, who make up about 80 per cent of stock market deals, would start pulling out their investments.

Samar Mohamed, a trader, said the ministry's decision would not "benefit the state treasury," warning that it would "primarily harm small individual investors."

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