Finance Bill amended: every company must withhold five percent of bonus shares to be issued

The approved Finance Bill 2014 here on Saturday said that every company, quoted on stock exchange, issuing bonus shares to the shareholders of the company, shall withhold five percent of the bonus shares to be issued.
According to the new procedure on deduction of tax on bonus shares issued through amendments to the Finance Bill (2014-15), bonus shares withheld shall only be issued to a shareholder, if the company collects from the shareholder, tax equal to five per cent of the value of the bonus shares issued to the shareholder including bonus shares withheld, determined on the basis of day-end price on the first day of closure of books. Notwithstanding anything contained in any law for the time being in force, every company, quoted on stock exchange, issuing bonus shares to the shareholders of the company, shall withhold five per cent of the bonus shares to be issued.
It said that the tax shall be collected by the company, within fifteen days of the first day of closure of books. If the shareholder fails to make the payment of tax within fifteen days or the company fails to collect the said tax within fifteen days, the company shall deposit the bonus shares withheld in the Central Depository Company of Pakistan Limited or any other entity as may be prescribed.
The bonus shares deposited in the Central Depository Company of Pakistan Limited or the entity prescribed shall be disposed of in the mode and manner as may be prescribed and the proceeds thereof shall be paid to the Commissioner, by way of credit to the federal government.
The issuance of bonus shares shall be deemed to be the income of the shareholder and the tax collected by the company or proceeds for the bonus shares disposed of and paid shall be treated to have been paid on behalf of the shareholder. Tax paid under this section shall be a final tax on the income of the shareholder of the company arising from issuance of bonus shares.
The amended Finance Bill (2014-15) approved by the National Assembly also issued procedure for bonus shares issued by companies not quoted on stock exchange. Notwithstanding anything contained in any law for the time being in force, every company, not quoted on stock exchange, issuing bonus shares to the shareholders of the company, shall deposit tax, within fifteen days of the closure of books, at the rate of five per cent of the value of the bonus shares on the first day of closure of books, whether or not tax has been collected by the company under sub-section (3).
The issuance of bonus shares shall be deemed to be the income of the shareholder and tax deposited shall be treated to have been deposited on behalf of the shareholder. A company liable to deposit tax shall be entitled to collect ad recover the tax deposited from the shareholder, on whose behalf the tax has been deposited, before the issuance of bonus shares.
If a shareholder neither makes payment of tax to the company nor collects its bonus shares, within three months of the date of issuance of bonus shares, the company may proceed to dispose of its bonus shares to the extent it has paid tax on its behalf. It said that the tax paid under this section shall be a final tax on the income of the shareholder of the company arising from issuance of bonus shares. The Board may prescribe rules for determination of value of shares, the procedure added.