Egypt in U-turn over proposed tax on share dividends and takeovers

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Egypt has cancelled a controversial proposal to tax share dividends and gains made in takeover deals, a senior advisor told Al Arabiya.

The proposals were part of sweeping new tax rules currently being discussed in Egypt, and had rattled markets and corporations in the economically fragile country.

Abdullah Shehata, economic advisor to President Mursi, told Al Arabiya that the decision had been made to cancel a proposed tax on both mergers and acquisitions and share dividends.

In a further sign that Egypt was easing its stance on the new charges, it emerged this week that taxes collected from Qatar National Bank 's acquisition of National Societe Generale Bank will be refunded to shareholders, Reuters reported.

Shehata said a proposed tax on buying stocks was still under discussion. That tax comprises a 0.001 percent charge paid by both buyer and seller in all Egyptian stock market transactions.

Egypt is still considering a tax on bank credit, loans and advances, Al Arabiya reported last week.

The new tax laws are currently being debated by the country’s upper parliament, known as the Shura Council.

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