CAIRO: A proposed capital gains tax on dividend payments has been scrapped after leading telecom tycoon Naguib Sawiris came out publicly denouncing the proposal. Analysts and market experts had long said the move would not be seen as a positive for Egypt in light of their economic woes. “We are happy that the finance ministry has decided not to go through with this tax because it now means we as a financial community will not be penalized for our efforts,” said one leading investor, who asked not to be named. But the ministry says it will continue to keep the proposal alive, adding that the income that it could have generated would have been able to do “great things” for Egypt. “This was on the table because these people are already extremely wealthy and we as a country need to get our infrastructure moving forward in the coming months and this tax would have given the government much better opportunities to invest in places,” said finance ministry official Ahmed Zubaib. “We are totally against it,” Sawiris, the founder of Cairo-based mobile phone operator Orascom Telecom Holding told Bloomberg news agency. Finance Minister Samir Radwan on June 1 had announced a 10 percent tax on dividend payments, mergers and acquisitions and asset revaluations as part of a draft budget that aims to support a widening budget deficit. The move appears to be dead for now. BM
