Egypt Outlines Second Tax Facility Package for Investors

Egypt has unveiled a second package of tax facilities aimed at attracting investment and easing burdens on businesses. Among the key measures, the government plans to replace the capital gains tax on stock market transactions with a stamp duty, and cut VAT on medical devices from 14 per cent to 5 per cent. The package forms part of a broader push to make the country's tax environment more investor-friendly while continuing to support strategic sectors such as industry and healthcare.

How the Package Came Together

The details were outlined by Minister of Finance Ahmed Kouchouk during a meeting with Prime Minister Mostafa Madbouly and Deputy Prime Minister for Economic Affairs Hussein Issa. Madbouly affirmed the government's full support for implementing the package successfully, with a particular focus on improving the services offered to taxpayers. The meeting signals continued high-level coordination behind the reforms, suggesting the measures carry strong backing across the government's economic leadership.

Capital Markets Get a Boost

For capital markets specifically, Kouchouk said the package introduces an investment incentive designed to encourage companies to list on the Egyptian Exchange over a three-year period, aiming to guarantee increased trading volume and investment. This will be paired with the replacement of the capital gains tax with a stamp duty intended to stimulate trading activity. Together, these two measures are designed to make the exchange more attractive both to companies considering going public and to investors already active in the market.

Relief for Industry and Healthcare

• VAT payment suspension on industrial machinery and medical devices extended from two years to four years
• VAT on medical devices cut from 14% to 5%
• Inputs for kidney dialysis machines, filters, parts, and supplies fully exempted from VAT
• Solidarity contribution to be deducted from the tax base, lowering the burden on all taxpayers
• Tax dispute resolution law renewed until the end of December 2026

These measures are aimed squarely at reducing the cost of doing business in Egypt's industrial and healthcare sectors, while the renewal of the dispute resolution law is intended to encourage the voluntary settlement of a large number of outstanding tax disputes between businesses and the state.

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What Changes for Real Estate

The real estate disposition tax for individuals will remain unchanged at 2.5 per cent of a unit's sale value, regardless of how often transactions occur. However, the new package introduces a full exemption for property transfers between spouses, children, and direct descendants, easing the tax burden on family-related property transfers and simplifying intergenerational wealth transfer within Egyptian households.

A Shift Toward a "Customer Service" Tax Culture

Kouchouk said the finance ministry's broader goal is to move the tax environment toward a culture centred on simplification and incentives rather than enforcement alone. He added that tax offices are prepared to execute the new measures precisely and flexibly as soon as the laws governing the second package are officially issued, indicating implementation could follow shortly after legislative approval.

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