The Securities and Exchange Commission of Pakistan (SECP) and Federal Board of Revenue (FBR) have agreed on some proposed amendments in the Finance Bill 2016 to remove anomalies, uniform tax treatment to different sectors, encourage listing of companies and incentives for specific sectors.
During an interactive session with media, SECP Chairman Zafar Hijazi and Akif Saeed Commissioner SECP informed that the FBR and SECP are actively interacting to finalise some changes in the Finance Bill to further encourage long term investments in sectors like insurance, pensions, mutual funds etc. Some major issues are under discussion between the FBR and the SECP for removal of anomalies and incentives to specific sectors etc. It is expected that the amended Finance Bill will incorporate the said proposals.
To a query, SECP Chairman said that the FBR has proposed the rate of collection of tax by stock exchange on purchase and sale of shares to be increased from 0.01% to 0.02% as per Clause (a) and (b) of Sub-section (1) of Section 233A of the Income Tax Ordinance, 2001. The proposal has not been floated by the SECP. This proposal has not been suggested by the SECP to the FBR.
Akif Saeed Commissioner SECP said that the FBR has included some important proposals of the SECP in the Finance Bill 2016. On the proposal of the SECP, Finance Bill 2016 has abolished 16 percent Federal Excise Duty (FED) on various services including stock brokers, banking companies, forex dealers, insurance companies, franchise services and other services where provincial sales tax is applicable.
The SECP has also proposed the FBR to compare holding period of capital market with the immovable properties in real estate sector. On the proposal of the SECP, the FBR has rationalised rates for Capital Gain Tax on Immovable Property. The FBR has proposed to extend the holding period for taxation of capital gain on sale of immovable property from two years to five years to be charged at uniform rate of tax of 10% The amendments relating to the voluntary pension scheme and mutual fund industry were part of the Finance Bill on the proposals of the SECP, they added.