FBR proposes study to explore CGT potential
The Federal Board of Revenue (FBR) has proposed a study on Capital Gains Tax (CGT) to explore real potential of the CGT to be collected from stock exchanges. Sources told Business Recorder here on Monday that the said activity has been proposed by the FBR. Capital Market has significant share in Gross Domestic Product (GDP) of Pakistan, but revenue generation from this sector is less than its real potential.
Copyright Business Recorder, 2014
To properly gauge the potential of revenue and the identification of measures through which this potential can be tapped, a detail study on the subject has been proposed. Terms of Reference (ToRs) have been developed and communicated to the international donor agency for approval of the said study.
Through Finance Act, 2014, securities held for a period between 12 and 24 months have also been made taxable under the Income Tax Ordinance, at a rate of 10 percent. However, securities held for a period of more than 24 months shall continue to be taxed at 0 percent. Under Finance Act 2014, the CGT rates have been revised and for securities held up to one year capital gains shall be 12.5 percent, and for securities held between 12 and 24 months, the rate shall be 10 percent.