SECP Shares with FBR Tax Proposals Considered to Be Critical for Capital, Corporate Sectors

The Security and Exchange Commission of Pakistan (SECP) has shared with the FBR some key tax proposals considered to be critical for capital markets and corporate sectors.

The SECP offical told APP that the joint plan was still at a preliminary discussion point with FBR.

The SECP has had a first round of consultations with FBR officials, followed by the next round of discussions which was neither finalized nor approved.

 Addressing anomaly created in security description u/s 37A for calculating capital gains tax on listed securities. Required clarification for this was required.

Proposals to require perpetual status passage to all types of private funds have been introduced to unlock the ability of Private Funds.

In addition, given the revision of the regulatory framework and the implementation of Private Funds Legislation, consequential changes are sought in the Income Tax laws for 2015.

The plan to encourage recorded REIT systems aims at tackling short-term and insufficient tax incentives through REITs for the real estate sector.

Tax disparity between incorporated and non-incorporated undertakings discourages business and documentation. Various strategies for raising this difference over a period of time are being considered.

Considering the business situation, it is proposed to investigate the reduction of CGT rates for 2 years on disposal of the listed securities. Restore the distinction between short-term gains and long-term gains.

The SECP and FBR are working on several aspects of these proposals in close coordination.

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