Karachi, April 14, 2024 – Brokers at the Pakistan Stock Exchange (PSX) are making a plea for a more lenient tax framework on brokerage and commission as the country prepares for the 2024-25 budget.
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Pakistan stock brokers seek tax incentives
ISLAMABAD: Pakistan Stockbrokers Association on Wednesday proposed tax incentives on capital gain and investment in stock market.
Federal Minister for Finance and Revenue Shaukat Tarin held a meeting with a delegation of Pakistan Stockbrokers Association led by its Vice Chairman Zahid Latif Khan at Finance Division.
The delegation apprised the Finance Minister of certain issues and challenges impeding the growth of Capital market in Pakistan and sought support of government to resolve their issues.
They requested for providing tax incentives on Capital gain and investment in stock exchange.
Finance Minister Shaukat Tarin said that government is encouraging investment and enlisting of entities in the stock exchange.
He further assured the delegation his support to resolve their issues and for growth of Capital market in Pakistan.
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Sales tax rate on services provided by stock brokers
KARACHI: Sindh Revenue Board (SRB) has updated working tariff for tax year and notified tax rates for services provided or rendered by specified persons or businesses.
According to updated working tariff, the sales tax rates shall be applicable for following services:
Stock brokers and commodity brokers shall pay sales tax at 13 percent on services provided or rendered by them.
Underwriters shall be sales tax at the rate of 13 percent on services.
Indenters are also required to pay 13 percent sales tax on services. However, services provided by indenters are subject to reduced rate of three percent sales tax on:
1. Services provided or rendered by an indenter from a place of business in Sindh for which the registered person receives the value of the services from a place outside Pakistan in foreign exchange through banking channels in the business bank account of the registered person in the manner prescribed by the State Bank of Pakistan.
2. Input tax credit/adjustment shall not be admissible.
The sales tax rate shall be 13 percent on services provided by commission agents.
Similarly, the rate of sales tax shall e 13 percent on services provided or rendered by packers and movers.
Money changers are required to pay 13 percent sales tax on services However, there is exemption available on service provided or rendered by money changers in consideration of ‘spread’ charges as permitted by the State Bank of Pakistan in relation to the buying and selling of foreign currencies.
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Finance Bill 2019: FTR abolished on stock brokers’ commission
ISLAMABAD: The government has withdrawn Final Tax Regime (FTR) for stock brokers for the purpose of taxation on commission earned by them. The proposal has been presented through Finance Bill, 2019 before the Parliament.
In the budget 2019/2020 the government has taken several measures to plug loopholes of those avenues which were promoting black economy.
The elimination of FTR for stock brokers was also part of it. Now the tax brokerage commission would become under minimum tax regime.
The present government through Finance Supplementary (Second Amendment) Act, 2019 allowed the FTR on brokerage commission on the demand of stock brokers.
However, the ongoing review of Financial Action Task Force (FATF) regarding money laundering and black money the government had no choice but to withdraw FTR and presumptive tax regime.
With the proposed elimination of the FTR the brokers will liable to provide details of investors from whom they drive brokerage income.
Besides, stock brokers would also require to file complete income tax returns providing all details of their business transactions.
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Stock brokers directed to submit clients’ assets segregation statement
Karachi: The Pakistan Stock Exchange (PSX) has issued a directive requiring stock brokers to submit clients’ assets segregation statements duly verified by statutory auditors.
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