Karachi: The Pakistan Stock Exchange (PSX) has urged the government to reduce the Capital Gains Tax (CGT) rate, a news source reported. It has further requested the executive to rationalise the CGT structure in accordance with international practices.
PSX officials opined that the proposed changes would bring new taxpayers and increase tax revenue. They added that these changes would also attract domestic and international investors to Pakistan’s capital markets without negatively affecting the revenue. PSX stated that a review of CGT on listed securities was significant in light of changes made to the CGT structure on real estate.
The PSX has expressed its confidence that the rationalisation of CGT would help include a large number of people in the documented economy and tax net. It added that if not rationalised, then there was a higher chance of people being attracted towards the undocumented asset classes. PSX revealed that this would lead to domestic savings not channelled into the economy and lack of new taxpayers.
PSX has suggested the government to reduce the CGT rate to 10% for short-term investments and zero for long-term investments. It added that these measures would bring the rate in line with international and regional levels and with the government-proposed changes for real estate.
The Securities & Exchange Commission of Pakistan (SECP) and the Pakistan Stockbrokers Association (PSA) have lent their support to the PSX proposals for rationalising the CGT structuring and reducing the CGT rate.
