Govt agrees to review taxes on shares trading

Stockbrokers meet finance minister, blame high taxes for market’s downturn

KARACHI: Considering the current volatile situation of the Pakistan Stock Exchange (PSX) a right time to present their case, a stockbrokers association has been able to persuade the government to review the high taxes on stock transactions.

A seven-member delegation of the PSX Stockbrokers Association called on Finance Minister Asad Umar in Islamabad and pleaded that high rates of taxes on shares trading were one of the leading reasons behind the prolonged downturn at the PSX.

“Capital gains tax (CGT) and capital value tax (CVT)…on shares’ sales have remained among major hurdles in the way of recovery at the stock market,” Association President Hamad Kehar told The Express Tribune.



The PSX benchmark KSE-100 index has maintained a downturn since May 2017, when the then government imposed a uniform 15% CGT on filers of tax returns and 20% CGT on non-filers compared to various slabs earlier depending on the holding period of shares. The index nosedived 30% to a 28-month low of 36,767.57 points by the end of Monday’s trading compared to 52,876 points on May 24, 2017.

The downturn in the market is partly attributed to growing challenges in the real economy at present.

Umar was quoted as saying that the government was taking corrective measures and expressed hope that both the economy and the market would recover in coming days.

He said the government was making efforts to revive sluggish exports and restrict imports to narrow down the record high current account deficit of $18 billion, which is a primary cause of balance of payments crisis in the economy.

Later, the delegation met State Minister of Revenue Hammad Azhar, who assured them that he would review the rates of taxes on shares trading.



Association Vice President Munir Khanani, who also attended the meetings, said they would hold meetings with officials at the finance ministry and the Securities and Exchange Commission of Pakistan (SECP) on Tuesday.

He said the finance minister had consented to visit the PSX on Saturday.

Published in The Express Tribune, October 16^th, 2018.

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