Proposed amendments broaden NCCPL’s tax collection framework and standardise capital gains tax computation across financial sectors
ISLAMABAD: The federal government has proposed expanding the role of the National Clearing Company of Pakistan Limited in the collection and computation of Capital Gains Tax (CGT) through the Finance Bill 2026, a move aimed at creating a more uniform and efficient tax administration framework for Pakistan’s financial sector.
Under the existing provisions of the Income Tax Ordinance 2001, capital gains tax on the disposal of listed securities, along with applicable taxes including super tax, is computed, determined, collected and deposited by the National Clearing Company of Pakistan Limited in accordance with the Eighth Schedule of the Ordinance.
However, the current framework excludes mutual funds, banking companies, non-banking finance companies (NBFCs), insurance companies, Modarabas and companies dealing exclusively in debt securities from the NCCPL-administered collection mechanism.
NBFCs and Modarabas brought into tax collection framework
The Finance Bill 2026 proposes to expand the scope of NCCPL’s tax collection responsibilities by including non-banking finance companies, Modarabas and companies involved in debt securities within the CGT collection regime.
The proposed amendment is expected to streamline the administration of capital gains taxation and reduce disparities in tax treatment across different segments of the financial market.
Tax experts believe the inclusion of these entities will strengthen compliance mechanisms and improve the efficiency of tax collection related to securities transactions.
NCCPL to compute gains for banks, insurers and mutual funds
The bill also proposes a revised mechanism for banking companies, insurance companies and mutual funds.
Under the proposed changes, NCCPL will be responsible for computing and determining capital gains under Section 37A of the Income Tax Ordinance. However, these entities will continue to bear responsibility for depositing the tax on their capital gains in accordance with the existing provisions of the law.
The amendment seeks to centralise the computation process while preserving the responsibility of major institutional investors for meeting their tax obligations.
Towards a uniform capital gains tax regime
Market analysts view the proposed changes as an effort to establish a more consistent and transparent framework for the taxation of capital gains arising from securities transactions.
By expanding NCCPL’s role and standardising the calculation of capital gains across a broader range of financial institutions, the government aims to enhance regulatory oversight, improve tax compliance and simplify administrative procedures.
If approved by Parliament, the amendments will represent another significant step in the government’s wider agenda of modernising Pakistan’s tax administration and strengthening oversight of the country’s capital markets.
