ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has proposed measures to the Federal Board of Revenue (FBR) for the documentation of capital gains tax (CGT) records on the disposal of listed securities in the coming budget (2022-23).
In this regard, the SECP has proposed amendments in Section 100B (special provision relating to capital gain tax) of the Income Tax Ordinance 2001.
Presently, the special provision relating to capital gain tax shall not apply to a mutual fund; banking company, a non-banking finance company and an insurance company subject to tax under the Fourth Schedule; a modaraba; a company, in respect of debt securities only and any other person or class of persons notified by the Board.
According to the budget proposal of the SECP being reviewed by the FBR, the NCCPL has developed an automated CGT system to compute, determine, collect and deposit CGT on the disposal of listed securities. On the inception of the CGT regime in 2012, certain classes of investors including foreign institutional investors, unit holders of collective investment schemes and investors of future commodity contracts were excluded from the regime; however, subsequently these classes of investors were included in NCCPL’s CGT regime.
In order to further extend the CGT regime, NCCPL has envisaged that Bank, NBFIs and Insurance companies which are currently exempted from the applicability of section 100B of the Income Tax Ordinance, may be considered for inclusion in the NCCPL CGT regime. These entities determine CGT on their own and discharge their CGT obligation, if any, while filing their income tax returns.
Inclusion of these entities in the CGT regime will provide independent calculation and documentation of their CGT records.
The government will be benefited with the increased documentation provided in a centralized and transparent manner by NCCPL and this improved documentation will have a positive impact on the overall economy of the country. It will further enhance CGT withholding, the SECP’s proposal added.
Copyright Business Recorder, 2022
Comments
Comments are closed.