Capital gains tax: TRCG discusses key proposed section

SOHAIL SARFRAZ

ISLAMABAD: Tax Reform Coordination Group (TRCG) has discussed in detail the proposed section 100B (special provision relating to capital gain tax) and draft of the Eighth Schedule of the Income Tax Ordinance 2001 for the applicability of revised capital gains tax (CGT) regime on the stock exchanges.

Sources told Business Recorder that the day-long meeting of the TRCG was held at the Large Taxpayer Unit (LTU) Karachi to discuss the proposed draft of the Eighth Schedule of the Ordinance 2001. Technical discussions were held on various aspects of CGT, investment, amnesty and holding period, etc. Different opinions on the modus operandi for enforcing the law specifically proposed schedule of the Ordinance 2001 were given in the meeting.

It was discussed to reduce the holding period of 120 days to 45 days to ensure that the CGT could be charged during the period of April 1, 2012 to June 30, 2012. The proposed 120 days period is more than the 90 days period from April 1, 2012 to June 30, 2012. The draft of the Eighth Schedule of the Ordinance 2001 says that the amount remains invested for a period of 120 days in the manner as may be prescribed.

Some members of the TRCG strongly opposed a proposal to reduce sales tax on tea import. A representative of a multinational company had proposed reduction in sales tax on tea import to check smuggling. However, the idea was opposed by certain members of the TRCG.

The meeting also discussed the proposed tariff rationalization plan of the FBR for coming budget 2012-13, sources added.