PSX asks for rationalising capital gains tax on stock sale

Demands tax incentives in an attempt to shore up capital market

KARACHI: The Pakistan Stock Exchange (PSX), in its budget proposals presented to the visiting high officials on Friday, sought several tax incentives to support growth and betterment of the capital market.

According to a statement issued by the PSX, the bourse asked for rationalisation of tax on bonus shares, capital gains tax on disposal of securities and tax credit on stock listing.



It also demanded that the government review its policy of unrealised gains on the sale of immovable property to the Real Estate Investment Trust (REIT), investment in REIT be treated as investment in a stock fund, rationalisation of the tax regime for brokers and minimum tax on services rendered or provided by the PSX.

Special Assistant to the Prime Minister on Revenue Haroon Akhtar Khan, while chairing discussions on budget proposals for 2017-18, acknowledged that the tax incentives demanded by the bourse were “focused on revenue generation and betterment of the economy”.

He said Prime Minister Nawaz Sharif remained strongly committed to the progress of the country and its economic growth and gave example of the China-Pakistan Economic Corridor (CPEC), which had been acclaimed to be a game changer for Pakistan.

He cited the incentive packages given to various sectors of the economy such as those offered to the exporters, real estate investors, and retail and wholesaler sector.

He elaborated that the government’s policy was aimed at restoring investor confidence and putting in place an attractive system to encourage and bring back funds held abroad by Pakistani nationals in order to step up savings and investments in different sectors of the economy.

“Despite all the positive developments, there is still a need to do more … (so that) the country moves forward in all aspects,” the statement quoted Khan as saying.

He said governance of the country had become more difficult in recent times “because of the ever-growing unique challenges including those related to the region”.



Federal Board of Revenue Chairman Muhammad Irshad, who was also present in the meeting, agreed that further discussions should be held on the PSX proposals. “FBR will give these proposals a fair consideration in the best interest of the capital market and economy of the country,” he said.

PSX Chairman Muneer Kamal said: “Government support for the capital market will bring both domestic and international funds to Pakistan and help the corporate sector expand, generate employment, raise income levels and support increase in government tax revenues.”

Former PSX president Arif Habib and PSX Taxation Committee Chairman Abdul Qadir Memon explained that the proposals were meant for the growth and betterment of the capital market, which would result in revenue generation and contribution to the national exchequer.

Published in The Express Tribune, March 11^th, 2017.

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