The Federal Minster for Finance upon invitation of the Securities and Exchange Commission of Pakistan (SECP) had a visit to the Karachi Stock Exchange, today. The Minster highlighted various financial and economic reforms undertaken by the Government of Pakistan over the last few years. While appreciating the SECP’s initiative for improving liquidity in the market, enhancing investor education and awareness and the brokers’ capacity to trade, he announced the approval of SECP’s proposal on revamping of Capital Gains Tax (CGT) submitted to the FBR last week. The SECP had been in dialogue with the Ministry of Finance and the FBR on   the rationalization of CGT. The following solutions have been agreed upon for a more balanced and investment friendly CGT approach: -          In view of the official but undocumented gains accrued prior to the imposition of CGT an investment window will be provided till June 30, 2014 whereby investo...

ISLAMABAD: Working in conjunction with the Federal Board of Revenue, the Securities and Exchange Commission of Pakistan, through the Finance Act 2011-12, got the taxation regime for capital markets, corporate and non-banking financial sectors reformed. The SECP’s strategy encompasses continuation of reforms in the capital markets and corporate sector, deepening of structural reforms through removal of anomalies constraining economic activity, and to provide a level playing field to all the stakeholders, recommended various amendments to the 2001 Income Tax Ordinance, which were notified through the Finance Act 2011-12. The significant amendments are as follow: Tax Credit on Investment in new shares and for life insurance premiums/takaful contributions paid: To promote investments in initial public offerings (IPOs), the amount of eligible investment to benefit from tax credit on investment in IPO has been increased from existing Rs300,000 to Rs500,000. The percentage of the person’s tax...

The Karachi stock market closed in the negative zone as investors fretted over continued implementation of capital gains tax (CGT) on certain investments and offloaded their holdings. The Karachi Stock Exchange (KSE) 100-share index declined 20.79 points or 0.17 percent to close at 12,317.15 points as compared to 12,337.94 points of the previous session. The KSE 30-share index also lost 28.93 points to close at 11,778.40 points as compared with 11,807.33 points. Analysts said other reasons for the downtrend included, fall in global capital markets and declining value of oil in the international market. Investors preferred to stay to the sidelines owing to lack of positive triggers. The market turnover went slightly up by 1.16 percent to 54.80 million shares after opening at 54.17 million shares. The overall market capitalisation fell 0.15 percent to Rs 3.256 trillion as against Rs 3.261 trillion. Losers outnumbered gainers 154 to 97, while 104 stocks were unchanged. "Amid global s...

By Tanveer Ahmed KARACHI: Overcoming all the odds at the political and economic fronts, country’s capital market managed to sail through the turbulent water comfortably by posting 28 percent returns in the calendar year 2010. Starting the journey below 10,000 psychological barrier at 9386 at the beginning of the year, benchmark KSE-100 index settled well above 12022 points level on the last trading day of the year on Friday. A market experiencing low trading volume was exceptionally good when it came to returns by registering 28 percent gains and 26 percent in dollar terms, which owed to flooding of the foreign money in the market especially during the last quarter of the year. “Strong foreign inflows and recovery in corporate earnings led to a strong market performance in the final quarter with the index witnessing more than 71% of the gains in last three months of the year,” analyst Umar Bin Ayaz at JS Global Research said. Foreigners remained active in the market with net buying of ...

A senior team of FBR led by Mr. Asrar Raouf, Honorable Member Tax Policy, Federal Board of Revenue, met with representatives of the Karachi Stock Exchange to address issues related to capital gains tax. A consensus was reached on achieving tax payer facilitation to ensure widening of the tax net. Confidence building measures to achieve this include: 1. The committee considered various proposals to avoid hard-ship to tax-payers. A sub-committee comprising members from FBR, and The Karachi Stock Exchange was constituted to consider the same. 2. FBR will establish a separate cell for facilitation of foreign investors at LTU and RTO. This information will be provided to the Stock Exchange. 3. Financing income/markup under securities lending and borrowing regulations, margin financing and any other leverage products as approved by SECP, would be taxed at the rate of 10%, as full and final tax. 4. Gain or loss under day trading and trading in derivative products would be subject to CGT und...

Mohammed Sohail Local and foreign investors have raised many questions since the imposition of tax on gains made through share trading. It is so, as this tax has been imposed after a gap of more than three decades. In order to clarify some issues, following is a response to frequently asked queries. These answers are based on our understating and may change if tax authorities clarify the matter which they hopefully will in next few days. When will this tax be imposed? This tax will be imposed from July 1, 2010 on realised capital gains. There is some confusion regarding tax rate mentioned for tax year 2010 which we believe would be clarified as this tax will not be implemented before June 30, 2010. What is the rate of tax? For FY11 the gains realised from securities held for less than six months, the rate of annual income tax is 10 per cent and for securities held for more than six months and less than one year the annual tax liability would be 8 per cent of the gained amount. Again th...

The Karachi Stock Exchange ( KSE ), which gained 146.93 points last week, lost 149.07 points this week and closed at 9,774.07 points; failing to achieve 10,000 psychological level despite touching it twice this week amid uncertainty over the implications of the detailed verdict on NRO . The average turnover remained 207.882 million shares as compared to 157.020 million shares of the previous week; up 50.862 million shares. On the other hand, the KSE 30-index also lost 188 points and closed at 10285.97 as compared to 202.27 points gain in previous week. Bears overwhelmed the market for three days while bulls dominated the equity for two days only. The bourse started business on Monday with negative note when KSE 100-index shed around 28 points. On Wednesday and Thursday, market also lost heavily as KSE shed 50, 151 points respectively. Local investors opted for panic selling on Thursday on renewed concerns over judiciary action after NRO detailed judgement. Though, bourse lost almost...