Egyptian government outlines second tax facility package targeting industry and capital markets

Egypt has unveiled a second package of tax facilities designed to attract investment, ease costs for businesses, and support key sectors. The plan includes replacing the capital gains tax on stock market transactions with a stamp duty, and lowering value-added tax (VAT) on medical devices from 14 percent to 5 percent. The measures were presented by Minister of Finance Ahmed Kouchouk in a meeting with Prime Minister Mostafa Madbouly and Deputy Prime Minister for Economic Affairs Hussein Issa, who emphasized the government’s commitment to swift, effective implementation.

Key measures at a glance

• Capital gains tax on stock trades to be replaced by a stamp duty to encourage market activity.
• Three-year incentive to promote company listings on the Egyptian Exchange (EGX).
• VAT on medical devices cut to 5 percent; inputs for kidney dialysis machines fully exempt.
• Suspension of VAT payments on industrial machinery and medical equipment extended to four years.
• Solidarity contribution to be deductible from the tax base, easing the burden on taxpayers.
• Tax dispute resolution law renewed through the end of next December to support voluntary settlements.
• Real estate disposition tax remains 2.5 percent, with full exemptions for transfers within the immediate family.

Capital markets: Incentives to boost listings and liquidity

To invigorate capital market activity, the government plans to swap the existing capital gains tax on stock market transactions for a stamp duty. Officials expect this change to lower friction for investors and stimulate trading. Complementing this shift, a new three-year incentive aims to encourage more companies to list on the EGX, targeting higher trading volumes and fresh investment inflows.

Industry and healthcare: Lower VAT and longer relief on equipment

In a bid to strengthen industrial output and healthcare services, the tax package extends the suspension of VAT payments on machinery and equipment used in industrial production and on medical devices from two years to four. This measure is intended to preserve liquidity for producers and healthcare providers, enabling faster capital deployment and operational upgrades.

Separately, VAT on medical devices will be reduced from 14 percent to 5 percent, while inputs for kidney dialysis machines—including filters, parts, and necessary supplies—will be entirely exempt. These changes are expected to lower costs across the medical supply chain and improve patient access to critical care technologies.

Wider business relief: Deductible solidarity contribution and dispute resolution

For the broader business community, the solidarity contribution will be treated as a deductible expense, effectively reducing the taxable base and alleviating overall liabilities. To further support compliance and reduce litigation, the government will renew the tax dispute resolution law until the end of next December, encouraging taxpayers to voluntarily settle outstanding cases under clearer, more streamlined procedures.

Real estate transactions: Stable tax rate with new family exemptions

The real estate disposition tax for individuals will remain at 2.5 percent of the unit’s sale value, regardless of how often transactions occur. However, the package introduces a full exemption for property transfers within the immediate family—specifically between spouses, children, and direct descendants—removing a key friction point in intergenerational and intra-family asset transfers.

Implementation: A shift toward “customer service” in tax administration

Finance Minister Ahmed Kouchouk underscored the government’s goal of building a tax environment oriented around customer service, simplification, and incentives. Tax offices are preparing to implement the measures flexibly and accurately once the relevant legislation is issued. Prime Minister Mostafa Madbouly affirmed full government support to ensure smooth execution and tangible improvements in the services provided to taxpayers.

What this means for investors and businesses

• Investors may benefit from lower transaction frictions on the EGX, potentially improving liquidity and market depth.
• Manufacturers and healthcare providers could see meaningful cash-flow advantages from extended VAT suspensions and reduced VAT on medical devices.
• Businesses across sectors should gain from a lower effective tax base through the deductibility of the solidarity contribution.
• Taxpayers with pending disputes may find a more predictable pathway to resolution before the renewed deadline.
• Families managing property transfers could face fewer tax costs, easing succession and estate planning.

Collectively, the package signals a concerted push to support investment, foster industrial growth, strengthen healthcare delivery, and streamline tax administration—positioning the economy for greater resilience and competitiveness as the measures move from proposal to law.