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FBR to collect Rs10b additional revenue share transactions

FBR to collect Rs10b additional revenue share transactions

KARACHI: Federal Board of Revenue (FBR) is likely to collect Rs10 billion additional revenue from taxes on shares trading in the current fiscal year of 2017-18.

The government introduced several changes in tax rates and Income Tax Ordinance 2001 for tax year 2018 in order to generate additional revenue from the equity market instead of burdening public ahead of general elections next year.

Government, through Finance Act 2017, increased tax on dividend on shares income to 15 percent from 12.5 percent. Tax rate on dividend received from mutual funds was raised to 12.5 percent from 10 percent earlier, but the increased rate is applicable only if dividend income is above Rs2.5 million.

The official said taxes on stock market in Pakistan are lower as compared to regional markets. Yet, taxes on securities were also cut in the current fiscal year’s budget to promote stock market, added the official. The government cut tax on services provided by the stock exchange to two percent from eight percent.

FBR official said the government decided to slap 15 percent tax on capital gains for filers and 20 percent for non-filers in order to bring harmony. The uniform rates have replaced rates, which are variable according to holding periods. These rates were ranging between 7.5 percent to 15 percent and 11 percent to 18 percent for filers and non-filers, respectively.  The FBR official said new capital gain rates are applicable on securities acquired after July 1, 2016.