Egypt's government has suspended a two-year tax imposed on the market's capital gains, causing shares to rise in early trading.

Cabinet spokesman Hossam el-Qaweish said on Monday that the decision was aimed at preserving the "competitiveness of the Egyptian financial market." He says the measure is part of the ongoing efforts to achieve economic reforms while taking into consideration impact of such measures on the general investment atmosphere.

Immediately after the announcement of the suspension, Egypt's EGX 30 index rose 3.3 percent to 8562.07 according to Egypt's official news agency.

The suspension comes nearly a year after President Abdel-Fattah el-Sissi approved the law, which put 10 percent tax on capital gains that fueled a sell-off by investors.

El-Qaweish says a 10 percent tax on stock dividends will remain in place.