Revised CGT regime not applicable from April 1

RECORDER REPORT

ISLAMABAD: The revised regime of the Capital Gains Tax (CGT) on the stock exchanges will not be applicable from April 1, 2012.

Responding to a query on the revised CGT regime during a press conference here on Tuesday, Securities and Exchange Commission of Pakistan (SECP) Chairman Muhammad Ali said the revamped CGT regime is likely to be applicable beyond April 1, 2012 following promulgation of the Presidential Ordinance. However, the exact date of the issuance of the Ordinance cannot be specified till finalization of the revised law for the stock exchanges.

The revised CGT regime on the stock exchanges will be applicable in due course of time as both the Federal Board of Revenue (FBR) and the SECP are actively engaged in the finalization of the new CGT rules including proposed Ordinance. It is already March 28 and the revised CGT regime may be announced during April. However, it is premature to give exact date of the applicability of the revised CGT regime on stock exchanges, SECP Chairman added.

The Ordinance cannot be promulgated when the Parliament is in session. The draft of the Eighth Schedule of the Income Tax Ordinance 2001 on the CGT has proposed filing of wealth statement for the Tax Year 2012 by investors of stock exchanges. The proposed section 2 of the draft Eighth Schedule of the Income Tax Ordinance 2001 deals with the source of investment.

Under the draft of the Eighth Schedule, the proposed Schedule has also explained the responsibility and obligation of National Clearing Company of Pakistan Limited (NCCPL). A proposed section 100B (special provision relating to capital gain tax) has also been drafted which is related to the capital gains on disposal of listed securities and tax thereon, subject to section 37A, shall be computed, determined, collected and deposited in accordance with the Rules laid down in the Eighth Schedule.

This draft of the Eighth Schedule of the Income Tax Ordinance 2001 is being finalized among tax managers, Securities and Exchange Commission of Pakistan and Ministry of Finance.