Finance Division has said that there would be no double taxation on trading of shares on stock exchanges from 2009-10. A statement of the Finance Division said that there is some confusion regarding tax on services of stock exchanges, as announced in the Finance Bill, 2009.
The Revenue Division has clarified for the general public that stockbrokers of the stock exchanges provide services to their investors and earn commission on the trading. In the new budget, for the year 2009-10, it has been proposed to levy general sales tax on these services.
At present, capital value tax @ 0.2 percent is leviable under the Finance Act, 1991. As the GST is to be levied wef July 2009, in the Finance Bill, 2009, an amendment has been proposed to exclude "shares of a public company registered on stock exchange" from CVT. As such, the perception about double taxation is incorrect, the statement said.
When contacted, senior FBR officials said that CVT on shares trading has been abolished in the 2009-10 budget. As a number of services have been brought into the tax net, now services provided by the stockbrokers would also be liable to 16 percent sales tax. The move would generate more revenue in 2009-10 as compared to less collection of CVT on shares transactions, the officials added.