Egypt’s Finance Ministry has approved a new tax rule for stock market profits. Capital gains and dividends will both be taxed 10 per cent.

“The calculation of the tax on profits will be on the net value of the market capitalisation portfolio by the end of the year, compared with its value at the date of approving that law,” says a statement by the ministry. Expected losses over the coming three years will be taken into consideration.

The news caused Egypt’s exchange to drop 3.45 per cent on 29 May.

The move is part of a system of tax reforms that is meant to broaden the base of taxpayers and introduce progressive tax through new proposals on real estate tax and value-added tax. It is also tackling subsidies on energy in order to curb the country’s fiscal deficit, which has widened in recent years.