KARACHI: Pakistan Stock Exchange (PSX), in its proposals for budget 2017-18, has recommended 50 percent reduction in advance tax payable by stock brokers on commission earned on sale or purchase of shares.
The PSX recommended 0.01 percent advance tax on purchase or sale value against the existing tax rate of 0.02 percent, which was imposed through Finance Act, 2016.
The PSX said that the reduction of advance tax would help in minimizing refund claims and streamline cash flow problems of the genuine brokers. “It will also strengthen the government resolve that only due tax would be collected from the bonafide taxpayers,” the PSX said.
The stock market also recommended withdrawal of capital value tax as it was agreed by the government to abolish in the past on the purchase value of any modaraba certificate or any instrument of redeemable capital or shares of a listed company.
The PSX said that rightfully on July 01, 2009, the CVT on shares traded on the stock exchanges was withdrawn; however inadvertently CVT on any instrument of redeemable capital was not withdrawn.
The stock market said that instead removing the CVT on redeemable capital, the FBR re-imposed CVT on shares of a listed company along with CVT on modaraba certificates or any instrument of redeemable capital through Finance Act, 2012.
“To make matter worst, the government through Finance Act, 2016 doubled the advance tax rate in lieu of commission earned by such members from 0.01 percent to 0.02 percent of the value of purchase and sales of securities,” the PSX said.
