Egypt seeks tax on share trades: Finance Ministry

Samih Sawiris, Egyptian billionaire construction tycoon, speaks during an interview with Reuters to discuss his investment plans and outlook for the economy since the flotation of the pound in Cairo, Egypt February 21, 2017. (Reuters /Atef Hussein)
Updated 23 February 2017
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Egypt seeks tax on share trades: Finance Ministry

CAIRO: Egypt’s Finance Ministry is recommending a tax on stock exchange transactions of 0.2 percent on both sellers and buyers, a senior ministry official told Reuters on Thursday.
The official said he expected the stamp duty to come into effect before May and to generate revenue of 1 billion to 1.5 billion Egyptian pounds ($63 million to $94.5 million) in 2017/18.
“We will send the income tax law amendments in early March to parliament, and they will include imposing a stamp tax on bourse transactions of 4 pounds per 1,000, which will be 2 pounds per 1,000 on the seller and 2 pounds per 1,000 on the buyer,” the official said.
“We are targeting implementation of that tax before next May,” he added.
The EGX 30 main index fell by 1.34 percent after the news, but economists said investors would take it well, having expected, and priced in, a higher tax rate.
“The stamp tax of 0.2 pct is definitely below market speculation of 0.4 to 0.5 percent, so this is more of a relief for the market, which had been pricing in a much higher rate, said Allen Sandeep, head of research at Naeem Brokerage in Cairo.
“While this is an acceptable rate for an emerging market like Egypt, deferment of the tax charge would still be the ideal scenario, given the (current) emphasis on attracting foreign capital,” he added.
Egypt imposed a stamp duty on buyers and sellers in May 2013, collecting more than 350 million Egyptian pounds ($18.77 million) in revenue before the levy was replaced in July 2014 by a 10 percent capital gains tax.
Egypt suspended the capital gains tax in May 2015 for two years, under pressure from investors. They said it was discouraging business just as Egypt was struggling to recover from a plunge in confidence after a 2011 uprising and subsequent political upheavals.
The Higher Investment Council last year extended the suspension of capital gains tax for three years, until 2020 as part of efforts to draw investors back.
More than 270 companies are listed on the Egyptian stock exchange and more than 500,000 investors are registered to trade there.


Britain unveils “short and sharper” code for companies

Updated 16 July 2018
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Britain unveils “short and sharper” code for companies

  • The new code emphasises the need for boards to refresh themselves, become diverse and plan properly for replacing top jobs
  • Company remuneration committees should also take into account workforce pay when setting director pay

LONDON: Companies in Britain must strive to rein in excessive executive pay and make boards more diverse under a new “short and sharper” corporate code, published on Monday.
The Financial Reporting Council (FRC) has updated its code of corporate standards for publicly listed companies, which must comply with it or explain to shareholders if they do not.
The new code comes as the watchdog, which oversees company governance standards and accountants, faces a review to see if it can uphold high corporate standards to maintain Britain’s attractions as a place to invest after Brexit.
British lawmakers have called for tougher corporate govenance standards following a row between food retailer Tesco and its suppliers and the collapse of retailer BHS and outsourcer Carillion. And shareholders have become much more active in terms of rejecting some executive pay deals.
“To make sure the UK moves with the times, the new code considers economic and social issues and will help to guide the long-term success of UK businesses,” FRC Chairman Win Bischoff said.
“This new code, in its short and sharper form, and with its overarching theme of trust, is paramount in promoting transparency and integrity in business for society as a whole.”
There is a new provision for greater board engagement with the workforce to understand their views — aimed at reinforcing an existing provision in law since 2006 which has had a patchy impact.
This, along with a requiremnent to have “whistleblowing” mechanisms that allow directors and staff to raise concerns for effective investigation, mark the biggest broadening of corporate standards in many years, the FRC said.
“The new code is much stronger on abilities to raise concerns in confidence,” said David Styles, FRC director of corporate governance.
It also emphasises the need for boards to refresh themselves, become diverse and plan properly for replacing top jobs.
It introduces a requirement for companies to explain publicly if a board chair has remain unchanged for more than nine years.
Company remuneration committees should also take into account workforce pay when setting director pay.
“To address public concern over executive remuneration... formulaic calculations of performance-related pay should be rejected,” the watchdog said.