In a move that led to the loss of billions of Egyptian pounds on the stock market, the Ministry of Finance issued implementing regulations April 7 for a law ratified by President Abdel Fattah al-Sisi in mid-2014 imposing a 10% tax on stock market profits for shareholders and speculators. The law had been met with opposition from businessmen and preceded the loss of billions of pounds on the stock market after the government began discussing it on May 31, 2014, until its ratification by Sisi on July 2, 2014. Mohamed Omran, head of the stock exchange board, had issued a statement April 6 calling for postponing the issuance of the regulations for fear of further stock market losses.

A source from the Egyptian Businessmen Association who spoke to Al-Monitor on condition of anonymity expressed his opposition to the new tax law. He said it would serve as a disincentive to investors at a time that requires attracting investments. Awad al-Tarsawi, legal adviser for the Egyptian Association for Financing and Investment, a nongovernmental association of stock market employees, including businessmen, said in an April 15 statement that the association was preparing to appeal the implementing regulations before the administrative court and challenge the constitutionality of the law itself.

Egyptian businessmen, particularly goods importers who deal with foreign firms in US dollars, were also angered by the central bank’s Feb. 4 decision to limit deposits of US dollars by individuals and companies to no more than $10,000 per day and $50,000 per month. Ahmed Shiha, head of the importers’ division at the Cairo Chamber of Commerce, told Al-Monitor that the decision had led to a paralysis in import activities. The decision aims to reduce demand for the dollar, thus lowering its price on the currency black market, which was hit hard by the decision, losing billions of pounds daily because of decreased demand. The move was also designed to slow growth in imported consumer goods.

Economic expert Farag Abdel Fattah expressed his support for the new tax and restrictions on deposits. Speaking to Al-Monitor, he said that all profits should be subject to taxes, including stock dividends, to promote social justice. In addition, he agrees that the limits on dollar deposits will reduce demand for the currency and affect the black market and consumer goods imports as intended. This is particularly so with the central bank selling millions of dollars on March 1 to the banks through the interbank service to cover pending shipping requests by importers of essential goods — pharmaceuticals, raw materials and food — but excluding consumer goods. Abdel Fattah said that this step was taken after the liquidity of the dollar among the banks decreased, about a month after the decision to restrict dollar deposits.