CAIRO - Egypt has dropped plans to levy a tax on share dividends, will not revive it this year and is looking for ways to reduce planned expenditure as a result, the Finance Minister said on Thursday. The government dropped the planned tax after strong opposition from investors. Egypt's benchmark share index suffered its biggest decline in six weeks last Thursday after the tax was unveiled in the draft 2011/12 budget. "We never had a plan to impose a capital gains tax in the traditional sense. All we discussed is a tax of 10 percent on distributed gains from the stock exchange, on dividends," Finance Minister Samir Radwan told Reuters by telephone. "For the time being, we are not imposing this tax so that we encourage the stock exchange." He ruled out reviving the idea of a dividend tax later this year said there were no other changes in the government's budget approved by cabinet on Wednesday. Asked how the government would compensate elsewhere in the budget for dropping the dividend tax, Radwan said: "I am trying to see if we can reduce expenditure somewhere."
