KARACHI: Federal Board of Revenue (FBR) and Pakistan Stock Exchange (PSX) have discussed tax proposals for budget 2017/2018 at a meeting held here on Friday.
The meeting was attended by Haroon Akhtar Khan, Special Assistant to Prime Minister on Revenue, Dr. Muhammad Irshad Khan, Chairman, FBR, Zafar Hijazi, Chairman, Securities and Exchange Commission of Pakistan (SECP), Munir Kamal, Chairman, Pakistan Stock Exchange, Nadeem Naqvi, Managing Director, PSX, brokers and senior officials of FBR.
Abdul Qadir Memon, Member, PSX presented tax proposals of the capital market for fiscal year 2017/2018.
In its major proposals, the PSX proposed abolishing withholding tax on bonus shares issued by listed companies. Presently, listed companies are required to withhold five percent tax on the bonus shares to be issued.
The stock exchange recommended extension in period for tax credit in case of new listing on stock exchange. The PSX informed that presently tax credit had been allowed to new listing for a period of two years, which was very short period. Therefore, the stock exchange demanded that the period should be enhanced to five years.
Regarding capital gain tax, the meeting was informed that last year CGT was imposed at 7.5 percent on shares sold any time beyond two years. The stock exchange recommended that this period should be restricted to five years and after five years there should not be any tax on disposal of shares.
It is also proposed that income tax on rental Real Investment Trust (REITs) should be exempted. Further the earning of the stock exchange should be treated as stock fund for taxation purpose instead of money market fund.
