FBR rejects request for exemption

Published: July 10, 2010
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Modalities of  Capital Gains Tax agreed upon

Modalities of Capital Gains Tax agreed upon

Members of the Federal Board of Revenue (FBR) met with representatives of the Karachi Stock Exchange (KSE) to address issues related to the implementation of Capital Gains Tax (CGT) at local bourses.

According to a notification issued by the KSE, consensus was reached on achieving taxpayer facilitation to ensure that the tax net was widened.

KSE was represented by Managing Director, Adnan Afridi and Arif Habib, a prominent member of the exchange. The FBR delegation was headed by Asrar Rauf, Member Tax Policy FBR.

Addressing reporters after the meeting, Rauf announced that the FBR would not exempt investors with portfolios of under Rs20 million from revealing their source of income.

According to the agreement reached on Friday, special counters would be established for foreign investors in the large and regional taxpayer units of FBR. It was disclosed that 10 per cent CGT would be levied on financing income/markup under securities lending and borrowing regulations, margin financing and any other leverage product.

KSE representatives expressed reservations about the requirement of filing returns quarterly.

The FBR delegation gave assurances that the tax system would be further simplified and steps would be taken to facilitate taxpayers.

Asrar Rauf promised that all reasonable demands and suggestions would be kept in mind before a final policy was laid down.

The official notification also announced that all modalities regarding the implementation of CGT have been agreed upon by the representatives of stockholders and the FBR team.

Breakthrough on margin trading

The committee formed to explore the avenues of introducing a liquidity product in capital markets concluded deliberations on Friday.

The independent committee of professionals formed by the Securities and Exchange Commission of Pakistan (SECP) has finalised discussions on recommendations for a new margin trading product.

According to a press release issued by the Karachi Stock Exchange (KSE), the final report of the recommendations of the committee will be finalised for submission to the SECP by next week.

A representative of the National Clearing Company of Pakistan told The Express Tribune that all major modalities concerning the new leverage product have been agreed upon with representatives of brokers, the exchanges as well as other stakeholders.

The SECP is expected to review these recommendations before presenting the draft to the Federal Finance Ministry.

The agreement was hailed as a positive development by experts who said that intense negotiations over two days had resulted in an agreement between all stakeholders.

The introduction of a new margin trading mechanism is expected to take another four to six weeks.

However, analysts commented that the resolution over margin trading and clarity regarding the implementation of CGT will greatly improve investor confidence.

Published in The Express Tribune, July 10th, 2010.

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Reader Comments (1)

  • Arsalan Khan
    Jul 13, 2010 - 10:05PM

    FBR is the might.Recommend

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