Capital Gains Tax Cut Unleashes Egypt’s Stock Market
May 21, 2015
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The ancient Egyptians worshipped divine bulls...and now it seems to be paying off!
The country's stock market has gone bullish after it halted capital gains taxes.
Egypt suspended a capital gains tax on Monday, sending shares soaring after a months-long downturn in which investors had complained of a lack of clarity about the new taxes, with some even taking the government to court. Immediately after the announcement, Egypt's EGX 30 index rose 3.3 percent to 8562.07, according to Egypt's official news agency. By late afternoon, shares were up 6.5 percent. President Abdel-Fattah el-Sissi approved a law nearly a year ago which placed a 10 percent tax on capital gains, fueling a sell-off by investors in an economy already battered by years of political unrest since the 2011 uprising. The law had been part of a broader government effort to broaden the tax base as it pushed through a host of tough measures, including slashing fuel subsidies, amending the property tax law, imposing a 10 percent tax on stock dividends and allowing the Egyptian pound to devalue somewhat against the dollar.Contrast that with President Obama, who used America's moms as an excuse to propose capital gains tax increases.
In a wide-ranging interview with Vox, Obama discusses his proposal to raise capital gains taxes on couples making more than $500,000 a year to help pay for middle-class tax breaks. The rate would go from 23.8% to 28%. Obama tells Vox’s Ezra Klein the capital-gains proposal “would make a big difference in our capacity to give a tax break to working moms for child care.” And, says Obama: “There’s no evidence that would hurt the incentives of folks at Google or Microsoft or Uber not to invent what they invent or not to provide services they provide.”