Egypt sees IMF loan deal in Dec, cabinet approves stock market tax

Wed Nov 7, 2012 3:14pm GMT
 

By Patrick Werr

CAIRO (Reuters) - Egypt expects to reach a loan agreement with the IMF by mid-December after talks this month focusing on limiting the budget deficit and a minimum level for its foreign reserves, the finance minister said on Wednesday.

He also said the cabinet had on Wednesday approved a new 10 percent tax on major transactions on the Egyptian stock exchange, including initial public offerings (IPOs). The president said in August there would be no new taxes.

Mumtaz al-Said said that the new tax was still being drafted and would have to be approved by the president or by parliament if one is elected in time. Parliament was dissolved this year after the voting method was challenged.

"Taxes will be imposed on gains achieved on each IPO for the first time and a tax on acquisitions if the deal exceeds 33 percent of the company's capital or shareholder rights," the finance minister said. He did not give a timeframe for the new tax.

An International Monetary Fund technical team has been in Cairo since October 31 to negotiate a $4.8 billion loan that Egypt asked for to shore up finances hammered by last year's popular uprising. The talks are expected to last two weeks.

"The talks with the IMF technical team have been extremely positive," the finance minister told reporters.

Speaking after a cabinet meeting, he said he expected the technical team to present the results of the negotiations to the IMF's board in mid-November for final approval by mid-December.

The talks have focused on putting a limit on the budget deficit for this fiscal year that began July 1, after the shortfall climbed to 11 percent of gross domestic product in 2011/12, he said.   Continued...

Egypt's President Mohamed Mursi speaks with China's Vice President Xi Jinping (not pictured) during their meeting at the Great Hall of the People, in Beijing August 29, 2012. REUTERS/How Hwee Young/Pool
 
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