CAIRO: Officials at Egypt's stock exchange welcomed Finance Minister Samir Radwan's decision to cancel a proposed capital gains tax, and the benchmark index responded by rising 1.3 percent on Thursday. The EGX 30 ended the week at 5,505 points while the broader EGX 100 rose 1.0 percent. Real estate stocks pushed the market up with Delta Construction and Rebuilding, Upper Egypt Contracting and El Obour Real Estate Investment among the top fiver gainers. Radwan confirmed to Reuters that government had dropped a plan to levy a tax on share dividends, would not revive it this year and was looking for ways to reduce planned expenditure as a result. In a statement, the stock exchange said the decision to cancel the tax came at the right time, considering the critical state of Egypt's economy and the need to attract foreign investment to create jobs, increase revenues and achieve higher growth rates. Mohamed Abdel Salam, bourse chairman, said scrapping the law came as a relief to investors in Egypt's capital market. “This enhances the competitiveness and attractiveness of the Egyptian market compared to neighboring markets and will facilitate the flow of investments and increases opportunities for growth of listed companies,” he said in a statement. Egypt's benchmark EGX 30 index made its largest drop in six weeks on June 3 when a 10 percent tax on capital gains was announced as part of the national budget plan for the next fiscal year. It recovered some of loses when the government said it would not tax profits on stock and bond market trades. At the time it was announced, Abdel Salam slammed the tax as a deterrent to investment and vowed to fight its implementation. Reuters reported that Radwan ruled out reviving the idea of a dividend tax later this year and said there were no other changes to the draft budget approved by cabinet on Wednesday. It is due to pass into law once it is approved by Egypt's ruling military council.
