Bonus shares: PSX proposes rationalization of tax

The Pakistan Stock Exchange has proposed rationalization of tax on bonus shares and tax credit on enlistment at the stock exchange in its proposals for the federal budget for 2017-18. These proposals were presented and discussed during a high-level meeting chaired by Haroon Khan, Special Assistant to the Prime Minister on Revenue, who visited Pakistan Stock Exchange Limited today (Friday).
Those who attended the meeting included Muhammad Zafar-ul-Haq Hijazi, chairman of the Securities and Exchange Commission of Pakistan, Dr Muhammad Irshad, chairman of the Federal Board of Revenue, Akif Saeed Commissioner Securities and Exchange Commission of Pakistan, Musarrat Jabeen, executive director (SMD) of the Securities and Exchange Commission of Pakistan, and senior officials of the Federal Board of Revenue.
The Stock Exchange was represented by its chairman Muneer Kamal and members of its Board of Directors and Taxation Committee. He briefed the attendees on the successes of the capital market and the steps taken by the government for the betterment of the capital market and the economy. Arif Habib, industrialist and capital market specialist who is a former president of the Stock Exchange, and Abdul Qadir Memon, chairman of the Taxation Committee of the Stock Exchange, explained proposals for the growth of the capital market.
The proposals discussed were rationalization of tax on bonus shares; tax credit on enlistment on the stock exchange; capital gain tax (CGT) on disposal of securities; unrealised gains on sales of immovable property to a REIT scheme; investment in REIT treated as investment in stock fund; rationalization of the taxation regime for brokers; and applicability of minimum tax on services rendered or provided by the Stock Exchange.
The chairman of the Securities and Exchange Commission of Pakistan highlighted the continuous co-operation and co-ordination extended by the government to the Commission for the introduction and implementation of healthy and prudent policies and initiatives undertaken by the Commission. He further reiterated support for the capital market.
The chairman of the Federal Board of Revenue gave the assurance that the Board will give the proposals fair consideration. He stated that the FBR will leave no stone unturned to facilitate the business community.
Haroon Khan, Special Advisor to the Prime Minister, elaborated on the fundamental vision and objectives of the government under the leadership of the Prime Minister Mian Nawaz Sharif and the positive outcome of the policies and measures undertaken by the government since it came to power in 2013. Haroon Khan said the business community should come forward with suggestions and support the positive initiatives of the government.
He emphasised that the vision of the Prime Minister and his government is very clear, and despite the challenges, the Prime Minister remains strongly focused on betterment of the country and its economic growth. He gave the example of CPEC which has been critically acclaimed as a game changer for Pakistan. He gave examples of packages given to various sectors of the economy, such as those given to exporters, real estate sector and retail & wholesaler sector.
On another aspect of the vision of the Prime Minister, he said, was restoration of investor confidence and putting in place an incentivized system to encourage and bring funds held abroad by Pakistani nationals into the country so as to encourage savings and investments in various sectors of the economy. The chairman of the Stock Exchange thanked the guests for their support for the development of the capital market. He said the government's support for the capital market would bring in domestic and foreign funds into Pakistan and help the corporate sector expand, generate employment, raise income levels and support an increase in government tax revenues.