KARACHI: The government is likely to abolish advance tax on sale and purchase of shares in the capital market on the demand of Pakistan Stock Exchange (PSX), sources said on Saturday.
Under Section 233A of Income Tax Ordinance, 2001, the PSX is required to collect 0.2 percent advance tax from its members on sale/purchase of shares in lieu of tax on the commission earned by such members.
Prime Minister Imran Khan on December 09, 2018 visited Karachi. During this visit the stock exchange and PSX Stockbrokers Association presented some demands to promote the capital market.
The sources said that the finance ministry had sought input from Federal Board of Revenue (FBR) and Securities and Exchange Commission of Pakistan (SECP) on the proposals of PSX and brokers association.
Finance Minister Asad Umar during his visit to Karachi Chamber of Commerce and Industry (KCCI) on January 12, 2019 hinted about the resolution of demands by saying that the stock market would have ‘good news’ soon.
The PSX and brokers association had presented proposals to the prime minister, included:
i. Abolition of advance tax on 0.2 percent on sale/purchase of shares.
ii. Allow carry forward of capital losses up to three years.
iii. Rationalization of taxation of holding companies on inter corporate dividend.
iv. Rationalization of capital gain tax on equities in line with real estate.
v. Promote list of government and CPEC projects debts at PSX.
vi. Curtail over regulation of brokers to promote equity investment.