KARACHI:
The finance minister has approved the Securities and Exchange Commission of Pakistan (SECP) proposal on revamping Capital Gains Tax (CGT) on Saturday, which among other clauses will allow investors to inject money without declaring the source of income till June 30, 2014.
The Finance Minster Abdul Hafeez Shaikh made the announcement during his visit to the Karachi Stock Exchange, according to a press statement issued by SECP.
The purpose of the scheme is to attract new investment to the stock market, which has seen activity decline gradually since 2009. The rate of CGT will be frozen at the existing 10% on securities held for six months and 8% on securities held for a year till June 2014.
Subject to certain minimum holding period, which will be worked out between the Federal Board of Revenue (FBR) and SECP, the highest value of an investor’s portfolio till June 2014 shall be treated as income generated from the capital markets, adds the statement.
To provide ease of calculation and documentation to individual investors, the National Clearing Company shall act as a withholding agent to deduct and deposit the CGT. SECP and FBR, along with other capital market service providers, would work out exact details so that necessary changes are made by April 1, 2012.
In addition to the revamping of CGT, the SECP Chairman announced various additional measures for supporting activity in the stock market. This includes enhancing brokers capacity to execute business, the SECP will allow additional business limit and clearing of approximately Rs50 million per member of Karachi Stock Exchange against collateral of Rs10 million per member from the Clearing House Protection Fund.
Published in The Express Tribune, January 22nd, 2012.
COMMENTS (2)
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Excellent amendments but please do not take away my liberty, my adjustments for calculating gains and losses during fiscal year period. I am entitled to adjust on my Tax Return on my own without inteferance or hinder or to put a claim with FBR. Lets keep it Simple and easy for Tax Return Filers.
This NRO for investors in Stock Exchange. There is no reason or justification for this amnesty not to declare source of income. This is nether civil nor just..it is discriminatory..This will become best in world for money laundering..... FM and FBR International civil society will look down on Pakistan because of this step