KARACHI
\nThe Pakistan Stock Exchange (PSX) has demanded the government to reduce capital gain tax (CGT) rates on disposal of shares in the forthcoming budget 2022-23 to attract local as well foreign investors.
\nThe PSX in its budget proposals submitted to the Federal Board of Revenue (FBR) suggested that CGT rates on listed securities should be brought in line with other regional and OECD countries and with the CGT on sale of immovable property.
\nThis is essential to eliminate the tax driven distortion between different asset classes. Further, the CGT on all derivatives and future contracts traded on PSX to be taxed in line with future commodity contracts traded at PMEX.
\nThe PSX suggested introduction of registered savings (RSIA) and investment accounts and individual savings account (ISA). It proposed that the government should introduce a mechanism and regulatory structure for the launch of RSIAs or ISAs to help channel savings towards productive investments.
\n\u201cThese schemes will help channel capital which is invested in unproductive areas and from the large undocumented sector into productive parts of the economy,\u201d the PSX added.
\nThe stock exchange suggested grandfather provision for tax treatment for listed companies on the PSX. \u201cIn order to encourage companies to list, their tax status should be grandfathered at the time of listing application i.e. no new cases for past tax returns should be opened, except for such pending cases on which proceedings have already been initiated under the Ordinance, before the date of listing application, will continue as per the provisions of law.\u201d
\nThe PSX urged the authorities to rationalize tax rates for companies listed on the stock exchange. \u201cReinstatement of the repealed Section 65C of the Income Tax Ordinance, 2001 amended to allow tax credit to certain companies meeting the prescribed requirements of free float.\u201d
\nThe stock exchange proposed to eliminate the minimum tax regime for listed companies. \u201cMinimum tax regime should be eliminated or reduced for listed companies as such companies are documented and compliant with specific documentation requirements of various statutes,\u201d it proposed.
\nThe PSX recommended enhanced tax credit for listed small and medium enterprises (SME). \u201cIn order to encourage small and medium enterprises to get listed on the SME Board, the rate of tax for such listed SME companies should be lowered by giving tax credit of 50 per cent of tax payable for three to four years and 20 per cent onwards of the tax payable,\u201d it proposed.
\nThe stock exchange stressed the need for documenting the real estate sector and promotion of REITs structures. The PSX recommended: exempt advance tax on property transfer to \/ from a RIET Scheme; remove sunset clause for all categories of RIET; reduction of minimum tax rate applicable to RMCs in line with Asset Management Companies i.e. 30 per cent.
\nIn order to unlocking potential of private fund, the PSX suggested: insert proper definition of private fund referring to 2015 regulations; reinstate exemption of profit and gains to be given to all categories of private equity and venture capital including private fund; revision of Capital Gain Tax rates as provided for mutual funds, CIS and REITs; specified exemptions to include private fund.
\nFor levelling tax for corporates, the stock exchange suggested: inequality of taxation of businesses should gradually be removed by reducing corporate tax rate\/increasing tax rates for Association of Persons (AOPs); restoration of exemption on inter-corporate dividend between companies eligible for group taxation.<\/p>\n","protected":false},"excerpt":{"rendered":"
KARACHI The Pakistan Stock Exchange (PSX) has demanded the government to reduce capital gain tax (CGT) rates on disposal of shares in the forthcoming budget 2022-23 to attract local as well foreign investors. The PSX in its budget proposals submitted to the Federal Board of Revenue (FBR) suggested that CGT rates on listed securities should […]<\/p>\n","protected":false},"author":2,"featured_media":255695,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[6957,6958,205],"class_list":{"0":"post-259360","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-cgt-rates","9":"tag-equities-disposal","10":"tag-psx"},"yoast_head":"\n