ISLAMABAD: The Federal Board of Revenue (FBR) is evaluating a proposal to phase in increase in the rate of capital gains tax (CGT) from 10 to 17.5 percent on securities traded at stock exchanges in the upcoming budget.
It has been learnt that the board is considering increasing the CGT rate from the current 10 percent to 17.5 percent in a phase-wise manner. However, the stock exchanges have proposed that the rate of CGT on disposal of securities be kept unchanged at 10 percent (for holding period of less than six months) from Tax Year 2015 onwards.
The FBR has also proposed doubling withholding tax rates on cash withdrawal from banks and electricity bills in cases of non-taxpayers as compared to existing withholding tax rates for National Tax Number (NTN) holders filing returns from 2014-15.
The board has proposed to the Finance Ministry an increase in rate of withholding tax from 10 percent to a considerably high level where non-NTN holder industrial and commercial units are operating in the country.
The FBR can also provide the lists of the NTN holders filing returns to the banks. As the banks have computerised national identity card numbers (CNICs) based system, the banks can identify non-filers of returns and charge higher rate of withholding tax on cash withdrawal from banks.
The FBR will not implement the proposal of decreasing sales tax rate from 17 per cent to single digit rate. It requires complete revamping of the system and it would be done in the next six months or more period.
