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The Market ! => Pak Equities => Topic started by: Farzooq on February 13, 2010, 09:11:48 AM

Title: CGT -- Capital Gains Tax
Post by: Farzooq on February 13, 2010, 09:11:48 AM
Capital gains tax soon on stock market: Tarin  
 
Saturday, February 13, 2010
ISLAMABAD: Pakistan will impose a capital gains tax on stock market transactions in the new financial year beginning on July 1, Finance Minister Shaukat Tarin said on Friday.

Tarin, a respected finance minister who negotiated an International Monetary Fund loan in 2008, also addressed rumours about his resignation, saying he had not resigned nor had he discussed stepping down with anyone.

Speaking at a meeting on developing the private sector, Tarin referred to government efforts to boost revenue. “This year one of the areas which will ... be taxed for sure is capital gains on the stock market,” he said.

Pakistan’s tax-to-gross domestic product ratio of about 9 per cent is one of the lowest in the world and Tarin said the government aimed to raise it to at least 15 per cent in the next three to four years.

He gave no detail about the rate of the proposed tax on the stock market but the main Karachi Stock Exchange has proposed a 5 per cent capital gains tax in the next fiscal year, going up gradually to 10 per cent by 2014/15.

Capital gains tax would only be imposed on stocks which are held for 180 days or less, the KSE said in budget proposals posted on its website on Friday. The KSE also recommended that while introducing capital gains tax, all other taxes on stock market transactions should be abolished.

The imposition of a capital gains tax had been expected for several years, analysts said.

Tarin said this month he expected the fiscal deficit to be 5.3 per cent of gross domestic product or less this fiscal year compared with a target of 4.9 per cent. The economy could grow by more than 4 per cent in the next financial year after expected GDP growth of 3.4 per cent this fiscal year, he said. GDP growth last fiscal year was 2 per cent.
 
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on February 13, 2010, 09:13:29 AM
Gradual implementation of CGT proposed

AHMED MALIK
KARACHI (February 13 2010): The Karachi Stock Exchange (KSE) has proposed to the government to implement capital gain tax, initially at the rate of 5 percent in the next fiscal year, and gradually increase it to 10 percent by 2014-15. In its proposals for the federal budget 2010-11, the KSE has proposed gradual progressive capital gain tax implementation, initially at the rate of 5 percent, and to be elevated to 10 percent.

This schedule would apply to both equity and derivative products, it said. It has been proposed that the CGT should be implemented initially at the rate of 5 percent for the fiscal year 2010-11; 6 percent for 2011-12; 7 percent for 2012-13; 9 percent for 2013-14 and 10 percent for 2014-15.

The KSE has proposed that the capital gains tax introduced must be rational with the competitors for Pakistan to remain an attractive destination for portfolio investment. The holding period for exemption of capital gains shall be increased to 180 days or more for the year 2010-11 and for 2011-12; 270 days or more for 2012-13 and 2013-14 and 360 days or more for the year 2014-15.

Effective from July 1, 2010, capital gain tax for investors should be imposed only where the capital gains fall in the category of short term capital gain (holding period is less than 180 days.) The tax shall be applicable on all equity and derivative products, provided all other under-mentioned taxes currently applied on stock market transactions are removed.

These include withholding tax at 0.01 percent on purchase value of shares traded from members in lieu of their commission, withholding tax at 0.01 percent on sale value of shares traded from members in lieu of their commission, withholding tax at 0.01 percent on sale value of shares traded from members, withholding tax at 10 percent mark-up of COT/CFS from members (CFS & CFS MK-II at present stands discontinued).

Moreover, it is important to note that the rationale for removal of the above-mentioned withholding taxes is clear because of the implementation of federal excise duty (FED) on commission of brokers with effect from July 2009. However, it would not be out of place to mention that earlier the Finance Minister, on July 6, 2009 during a visit to the KSE, had announced that under sub-section (2) of Section 233A, of the Income Tax Ordinance 2001, the applicability of minimum tax would be changed to adjustable tax and under clause (c) of sub section (1) of section 233A of the Income Tax Ordinance 2001, the applicability of withholding tax on sale would be withdrawn/omitted to eliminate double taxation.

It was proposed that the government implement an effective date of July 1, 2010 which imposes a capital gains tax on securities purchased on July 1, 2010 and thereafter. The holding period of inventory (shares) as at June 30, 2010 will be deemed as over 6 months old and hence no capital gains tax will be levied irrespective when such inventory/shares are being disposed/sold. This should be a direct tax with no withholding as per international practice.

It has been proposed that CGT would be applicable only if the holding period is less than 180 days at the time investment is cashed out (redeemed and not reinvested) and the capital gain falls in the category of short term capital gain. It was also proposed that the capital gains and losses for non-residents are to be calculated in terms of the currency in which such investment is made as capital gain for investment in shares by a non-resident in US dollars are to be made in US dollars instead of Pakistani rupee.

It is therefore proposed that a proviso similar to section 48 of the Indian Income Tax Act 1961 be inserted in Section 76 of the Ordinance relating to cost of investment for the purpose of determining of capital gains. It is also suggested that redeemable capital which includes TFCs may be removed from the scope in order to develop the secondary market for these securities. In order to facilitate a speedy corporatisation and demutualisation of the KSE, certain exemptions are required in the Income Tax Ordinance, 2001 as well as Stamp Act.

The KSE focused its tax proposals on the CGT because it is a significant change to the current taxation regime and is committed to working with the government to implement a long term and effective tax policy. The capital gains, except banking companies, have been exempt from taxation and this exemption is due to be withdrawn from tax year 2010 and onwards. With the introduction of capital gains tax, all other taxes and levies related to purchase and disposal of securities would be abolished, with the exception of federal excise duty (FED) on brokerage services.

In view of the possible pressure being created in the market due to the uncertainty of how tax on capital gains will be imposed, KSE management has worked out what it believes will be a fair basis for imposing the tax and would urge the government to announce the proposed structure at the very earliest.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on February 13, 2010, 09:31:24 AM
KSE budget proposals seek 5 per cent CGT  
 
Saturday, February 13, 2010
By Salman Siddiqui

KARACHI: In budget proposals for 2010-11 submitted to the ministry of finance, the Karachi Stock Exchange (KSE) has suggested to initially impose five per cent Capital Gains Tax (CGT) on income from sale of shares with effect from July 1, 2010 and increase it to 10 per cent by fiscal year 2014-15.

In consultation with the ministry of finance, the Federal Board of Revenue (FBR) has reportedly decided to levy 10 per cent CGT in one go from July 1, 2010. Equity investors have been enjoying exemption from the CGT since 1974.

The KSE, in its proposals, said that exemption from CGT should be withdrawn from the set date after removing all other taxes being collected at different levels of shares’ sale and purchase.

Investors holding shares for a minimum period of 180 days should remain exempt from paying CGT in the first two fiscal years (from July 1, 2010 to June 30, 2012).

In the second phase, investors should be granted CGT exemption if they hold shares for a minimum period of 270 days in the next two fiscal years (from July 1, 2012 to June 30, 2014). Finally, those investors, who would opt to keep shares for a minimum period of 360 days, should be offered tax exemption from July 1, 2014 and onwards, said the proposals.

But, those investors who would sell shares on profit before the expiry of minimum holding period would be liable to pay Capital Gain Tax (CGT) at that times pre-set rate accordingly. Moreover, investors who would offload holdings in loss should not be taxed, the proposal sought.

“Our analysis found that only two countries in MSCI Frontier Markets and three countries in MSCI Emerging Markets have imposed a capital gains tax. Therefore, as we compete with these countries the capital gains tax introduced must be rational with our competitors for Pakistan to remain an attractive destination for portfolio investment,” proposal made the argument.

Capital gains and losses for non-residents are to be calculated in terms of the currency in which such investment is made. For example, capital gain for investment in shares by a non-resident in US Dollars is to be made in US Dollars instead of Pakistani Rupee. This is an internationally accepted practice as only real income or loss can be taxed, the proposal suggested and added, the implementation of this proposal will help attracting foreign investment into Pakistan, as investment would not be exposed to losses stemming from depreciation of the Pakistani Rupee.
 
Title: Re: CGT -- Capital Gains Tax
Post by: AAB SAIFY on February 13, 2010, 06:25:14 PM
Tax tax tax
ab yeh naya drama ,
matlab yeh keh jitna profit ho ga is amount pay 5% tax dena ho ga,
agar 1000 gain howa tu 50 rps tax 950 will be after tax ,
Thats What i understood am i right ,
 
am i right bro ,
Title: Re: CGT -- Capital Gains Tax
Post by: neelo on February 13, 2010, 06:29:50 PM
Tax tax tax
ab yeh naya drama ,
matlab yeh keh jitna profit ho ga is amount pay 5% tax dena ho ga,
agar 1000 gain howa tu 50 rps tax 950 will be after tax ,
Thats What i understood am i right ,
 
am i right bro ,


to me 5% means one whole upperlock. :khikhi:
Title: Re: CGT -- Capital Gains Tax
Post by: Learner7 on February 13, 2010, 06:32:31 PM
Parasites just suck the blood and do nothing. :laugh:
Title: Re: CGT -- Capital Gains Tax
Post by: Learner7 on February 13, 2010, 06:34:18 PM

to me 5% means one whole upperlock. :khikhi:


You are somewhat right. ::)
Title: Re: CGT -- Capital Gains Tax
Post by: AAB SAIFY on February 13, 2010, 07:14:12 PM
Its gain tax which means what ever you gain 5% give to uncle tarin ,
ab jitna per trade profit ho ga is main se 5% - thats what i still understood
pata nahi uncle sahib ko stock Exch
kia narazgee hai ,
9000 pe floor k waqt broker support fund mangtay rahay tu kaha aik rupia nahi don ga , aur ab tax tax ,   :banana:
kia uncle tarin pehlay kse director bhi thay not sure me,
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on February 15, 2010, 11:21:54 AM
Gradual implementation of CGT proposed by KSE (BR)

The Karachi Stock Exchange (KSE) has proposed to implement capital gain tax in a phased
manner, starting with 5% in FY11 and gradually increasing to 10% by FY15. The minimum holding
period for exemption of capital gains shall also be gradually increased from initial 180 days to 270
days or more in FY13 and 360 days in FY15. The KSE has also proposed to (1) apply CGT only if
the investor does not reinvest the capital gains from short-term investments and (2) calculate the
capital gains in the currency of investment rather than Pak Rupees for FIIs. Effective from 1st July
2010, capital gain tax on short-term investments shall replace all taxes currently applied on stock
market transactions. These include withholding tax at 0.01% on purchase and sale value of shares
traded from members in lieu of their commission, withholding tax at 0.01% on sale value of shares
traded from members and withholding tax at 10% on mark-up of COT/CFS from members.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on February 20, 2010, 12:23:07 PM
Stock exchanges: FBR to propose 10 percent CGT from July 1

SOHAIL SARFRAZ
ISLAMABAD (February 20 2010): The Federal Board of Revenue (FBR) will propose 10 percent capital gains tax (CGT) on stock exchanges from July 1, 2010, whereas withholding tax on shares transactions would not be abolished along with imposition of the CGT. Sources told Business Recorder here on Friday that the rate of CGT is much higher in European countries.

In case of India, 10 percent CGT is applicable on stock exchanges. As compared to higher rates applicable in other countries, 10 percent CGT is a reasonable rate, which would be discussed in the meetings with the stock exchanges. However, the withholding tax on all trading transactions made in the stock exchanges would remain intact during the next fiscal year.

The FBR has started consultative meetings with the stock exchanges so that they should know well before time about the imposition of CGT on stock exchanges. At present, exemption of capital gains tax on stock exchanges is available under clause-110 of Part-I of the Second Schedule of the Income Tax Ordinance 2001. Sources said that excise duty in value-added tax (VAT) mode would be abolished under the proposed Federal VAT Act, 2010. The Federal Excise Act would not be abolished from next fiscal year to continue with the excise duty applicable on a few commodities.

The new VAT Act would be discussed with the Parliamentarians in the next meeting of Senate standing committee on finance. President Asif Ali Zardai has also shown interest in briefing on the new VAT law. Once the law would be passed by the Parliament, an in-depth debate would take place among the stakeholders in May-June period.

Sources said that the Expeditious Refund System has to be implemented along with the enforcement of Federal VAT Act. If the system of speedy payment of refund failed, the whole scheme of VAT would be distorted. The whole scheme of VAT depends on prompt payment of refunds under the new scheme. There is a strong possibility of not taking additional revenue generation measures in the fourth quarter (April-June) 2009-10, keeping in view the current pace of revenue collection.

The revenue collection in the third quarter of current fiscal year would be strictly monitored before taking any decision for taking additional measures. The growth in December 2009 increased from 9 percent to 20 percent. Moreover, large-scale manufacturing is showing growth and along with sales tax and income tax registration is also improving. The audit of associations of persons (AOPs) and corporate sector has been started and recovery of outstanding arrears would also improve revenue collection.

The enforcement and administrative actions would also be instrumental in increasing collection. The increasing prices of POL products would also increase revenue collection. "We have the month of March 2010 to analyse position of revenue collection", sources added.

During the recent meeting in Dubai, the International Monetary Fund (IMF) and FBR agreed on the revenue collection target of Rs 1380 billion for 2009-10. IMF has been further informed that the total number of business returns had been substantially increased following extension in date of filing of returns. Sources said that the FBR has discovered 58,000 properties in Karachi where owners are earning huge amount of rental income, but are not filing income tax returns.

On the basis of information available from Foreign Office, around 70 houses have been rented to foreign missions and embassies in Karachi, but the owners are neither paying any taxes nor filing returns. When the FBR received data, the tax managers were shocked that owners of such embassies and foreign missions, earning rent in US dollars, are the most influential and powerful individuals of Pakistan.

Without disclosing names, sources said that most of owners of property rented to foreign missions are most influential people of the country. Some of the names are so prominent that if their names are disclose, people would be surprised that such famous people are not filing their income tax returns.

The FBR will also issue notices to the owners of property earning rental income in US dollars from embassies in capital, but failed to file returns. All commercial and industrial consumers of electricity would be asked to submit their status whether they are registered or not. Around 2.7 million commercial connections of electricity have been obtained by persons engaged in business activities like manufacturing, service providers like clinics/private hospitals, showrooms and many other professionals engaged in business activities.

Title: Re: CGT -- Capital Gains Tax
Post by: ::WASIF:: on February 20, 2010, 12:33:59 PM
10 % kis per hogaa Sale Value per Buy value per ya phir Net Capital Gain per against any Scrip or what so ever. please explain me anyone
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on February 20, 2010, 12:46:42 PM
10 % kis per hogaa Sale Value per Buy value per ya phir Net Capital Gain per against any Scrip or what so ever. please explain me anyone

its a tax on capital gain (profits) only
Title: Re: CGT -- Capital Gains Tax
Post by: me on February 20, 2010, 01:03:46 PM
10 % kis per hogaa Sale Value per Buy value per ya phir Net Capital Gain per against any Scrip or what so ever. please explain me anyone

Capital Gain par
Title: Re: CGT -- Capital Gains Tax
Post by: sumbul on February 20, 2010, 01:35:34 PM
Stock exchanges: FBR to propose 10 percent CGT from July 1

SOHAIL SARFRAZ
ISLAMABAD (February 20 2010): The Federal Board of Revenue (FBR) will propose 10 percent capital gains tax (CGT) on stock exchanges from July 1, 2010, whereas withholding tax on shares transactions would not be abolished along with imposition of the CGT. Sources told Business Recorder here on Friday that the rate of CGT is much higher in European countries.

In case of India, 10 percent CGT is applicable on stock exchanges. As compared to higher rates applicable in other countries, 10 percent CGT is a reasonable rate, which would be discussed in the meetings with the stock exchanges. However, the withholding tax on all trading transactions made in the stock exchanges would remain intact during the next fiscal year.

The FBR has started consultative meetings with the stock exchanges so that they should know well before time about the imposition of CGT on stock exchanges. At present, exemption of capital gains tax on stock exchanges is available under clause-110 of Part-I of the Second Schedule of the Income Tax Ordinance 2001. Sources said that excise duty in value-added tax (VAT) mode would be abolished under the proposed Federal VAT Act, 2010. The Federal Excise Act would not be abolished from next fiscal year to continue with the excise duty applicable on a few commodities.

The new VAT Act would be discussed with the Parliamentarians in the next meeting of Senate standing committee on finance. President Asif Ali Zardai has also shown interest in briefing on the new VAT law. Once the law would be passed by the Parliament, an in-depth debate would take place among the stakeholders in May-June period.

Sources said that the Expeditious Refund System has to be implemented along with the enforcement of Federal VAT Act. If the system of speedy payment of refund failed, the whole scheme of VAT would be distorted. The whole scheme of VAT depends on prompt payment of refunds under the new scheme. There is a strong possibility of not taking additional revenue generation measures in the fourth quarter (April-June) 2009-10, keeping in view the current pace of revenue collection.

The revenue collection in the third quarter of current fiscal year would be strictly monitored before taking any decision for taking additional measures. The growth in December 2009 increased from 9 percent to 20 percent. Moreover, large-scale manufacturing is showing growth and along with sales tax and income tax registration is also improving. The audit of associations of persons (AOPs) and corporate sector has been started and recovery of outstanding arrears would also improve revenue collection.

The enforcement and administrative actions would also be instrumental in increasing collection. The increasing prices of POL products would also increase revenue collection. "We have the month of March 2010 to analyse position of revenue collection", sources added.

During the recent meeting in Dubai, the International Monetary Fund (IMF) and FBR agreed on the revenue collection target of Rs 1380 billion for 2009-10. IMF has been further informed that the total number of business returns had been substantially increased following extension in date of filing of returns. Sources said that the FBR has discovered 58,000 properties in Karachi where owners are earning huge amount of rental income, but are not filing income tax returns.

On the basis of information available from Foreign Office, around 70 houses have been rented to foreign missions and embassies in Karachi, but the owners are neither paying any taxes nor filing returns. When the FBR received data, the tax managers were shocked that owners of such embassies and foreign missions, earning rent in US dollars, are the most influential and powerful individuals of Pakistan.

Without disclosing names, sources said that most of owners of property rented to foreign missions are most influential people of the country. Some of the names are so prominent that if their names are disclose, people would be surprised that such famous people are not filing their income tax returns.

The FBR will also issue notices to the owners of property earning rental income in US dollars from embassies in capital, but failed to file returns. All commercial and industrial consumers of electricity would be asked to submit their status whether they are registered or not. Around 2.7 million commercial connections of electricity have been obtained by persons engaged in business activities like manufacturing, service providers like clinics/private hospitals, showrooms and many other professionals engaged in business activities.



VERY BAD NEWS. PRESSURE ON MONDAY  :brickwall:  :down:
Title: Re: CGT -- Capital Gains Tax
Post by: ::WASIF:: on February 20, 2010, 02:00:04 PM
10 % kis per hogaa Sale Value per Buy value per ya phir Net Capital Gain per against any Scrip or what so ever. please explain me anyone

its a tax on capital gain (profits) only


ager loss hogaa tou kuch nahi hogaaa
Title: Re: CGT -- Capital Gains Tax
Post by: ::WASIF:: on February 20, 2010, 02:01:16 PM
10% is very high rate its really a very very bad news
Title: Re: CGT -- Capital Gains Tax
Post by: AAB SAIFY on February 20, 2010, 03:33:48 PM
10 % kis per hogaa Sale Value per Buy value per ya phir Net Capital Gain per against any Scrip or what so ever. please explain me anyone

its a tax on capital gain (profits) only


ager loss hogaa tou kuch nahi hogaaa
Abhi tu nahi hai magar tarin sb is ke liye
plan bana rahay hon gay keh woh bhi
kisi tarah awam se loss main bhi clt
capital loss tax wasool kia jaye.
Title: Re: CGT -- Capital Gains Tax
Post by: Learner7 on February 21, 2010, 07:02:11 PM
Taxing stocks

2/21/2010

Despite many strong rallies at Karachi Stock Exchange (KSE), over the last five months, 100-Index could not breach the 10,000 level. On the weekend the market once again closed at 9,900 mark raising hopes for a breakthrough but reports regarding imposition of capital gains tax (CGT) published on Saturday have once again wet-blanketed the expectations.

Many analysts fear substantial erosion in the key index next week if government does not assure investors that this proposal is not under consideration.

In fact it were brokers who themselves graciously agreed to pay 5 per cent CGT which gave  leverage to tax collectors bent on imposing 10 per cent CGT. They say that with bears in the house brokers should have convinced the government to steer clear of such adventurous moves. In fact they should have asked the government to bring down corporate tax rate and also abolish withholding tax (WHT) applicable on dividend being paid to the shareholders.
It is on record that public limited companies and their employees make the highest contribution to the national exchequer in the shape of import duty, sales tax/excise duty, income tax and WHT. The government has been milking this cow for decades and time for a payback has come.

The talk about the imposition of CGT has become a yearly pop-up, especially when tax collectors try to twist brokers' arms for some new taxes or higher rate of existing taxes. Ironically, brokers are becoming part of this coercive campaign because the money does not slip from their pockets; they act as collection agents at the best.
Tax collectors are citing example of India where 10 per cent CGT is levied to support their argument. This reference can only be termed bad because they completely ignore Dollar-Indian Rupee parity, prices of energy products etc. Indian government follows incentive laden investment policy and businessmen are given the status of commercially important persons (CIPs) whereas tax collectors never miss a chance to malign businessmen and often call them evaders.

It is the government that comes up with 'money whitening campaigns' which encourage businessmen evade tax. However, no one can deny that none can evade tax without the connivance of collectors. One can also go to the extent of saying that every businessman makes some contribution towards the national exchequer, how paltry it may be, but do the politicians and bureaucrats pay any tax on the ill-gotten money?
Title: Re: CGT -- Capital Gains Tax
Post by: Big Broker on February 21, 2010, 08:21:25 PM
10 % kis per hogaa Sale Value per Buy value per ya phir Net Capital Gain per against any Scrip or what so ever. please explain me anyone

Capital Gain par

Loss per refund milee ga ? :beatingheart:

what about capital loss ?
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on February 22, 2010, 12:02:04 PM
kse fbr meeting today on cgtax
Title: Re: CGT -- Capital Gains Tax
Post by: sumbul on February 22, 2010, 12:08:17 PM
kse fbr meeting today on cgtax

ALLAH RAHAM FARMAEY AMEEN  :fingerscrossed1:
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on February 22, 2010, 12:32:20 PM
kse fbr meeting today on cgtax

ALLAH RAHAM FARMAEY AMEEN  :fingerscrossed1:

if fbr agrees on 5% we may see kse crossing 10k   :fingerscrossed1:
Title: Re: CGT -- Capital Gains Tax
Post by: Honda 125 on February 22, 2010, 12:38:55 PM
kse fbr meeting today on cgtax

ALLAH RAHAM FARMAEY AMEEN  :fingerscrossed1:

if fbr agrees on 5% we may see kse crossing 10k   :fingerscrossed1:

Bhai FBR walay bhe siyanay ho gaey hain. They have started bargaining from 10 %  :khikhi: Agar 5 % say kartay tu brokers nay 2 or 3 % kehna tha. Ab agar 10 % bola ha tu at least 5 % tu maan he jain gay na...  :khikhi:
Title: Re: CGT -- Capital Gains Tax
Post by: sumbul on February 22, 2010, 12:47:24 PM
BAD NEWS IS THAT ALONGWITH 10% CGT; WITHHOLDING TAX IS NOT BEEN WITHDRAWN  :(
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on February 22, 2010, 04:33:24 PM
(http://www.jang.com.pk/jang/feb2010-daily/22-02-2010/updates/2-22-2010_21949_1.gif)
Title: Re: CGT -- Capital Gains Tax
Post by: chaudhary111 on February 22, 2010, 05:39:50 PM
(http://www.jang.com.pk/jang/feb2010-daily/22-02-2010/updates/2-22-2010_21949_1.gif)
Sir what is update about  this meeting :beatingheart:
Title: Re: CGT -- Capital Gains Tax
Post by: Tezihunt on February 22, 2010, 05:59:36 PM

VERY BAD NEWS. PRESSURE ON MONDAY  :brickwall:  :down:
[/quote]
Monday passed with positive movement.
No bad impact on market rather good imact
Meeting ended: Stock exchange members have given their consent to finance minster that CGT on 6 month or less holding will be @ 10% for starting two years and will be increased by 2.5% for next three years.
Title: Re: CGT -- Capital Gains Tax
Post by: chaudhary111 on February 22, 2010, 06:07:21 PM
kea bhaee logoo na  10% pr etifaq kr lea  :shock: :( :shock:
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on February 22, 2010, 07:56:09 PM

VERY BAD NEWS. PRESSURE ON MONDAY  :brickwall:  :down:

Monday passed with positive movement.
No bad impact on market rather good imact
Meeting ended: Stock exchange members have given their consent to finance minster that CGT on 6 month or less holding will be @ 10% for starting two years and will be increased by 2.5% for next three years.

where did u get this news from ??

Title: Re: CGT -- Capital Gains Tax
Post by: Tezihunt on February 22, 2010, 08:34:58 PM
where did u get this news from ??

Heard myself on CNBC and now is available on news ticker of many.
The news has lost shocking effect as it was in the market since last year....rather it will be better for the market in the long run if the matter is resolved once for all.
Title: Re: CGT -- Capital Gains Tax
Post by: ::WASIF:: on February 22, 2010, 09:22:54 PM
 :thumbsup_anim:
Title: Re: CGT -- Capital Gains Tax
Post by: kSE001 on February 22, 2010, 11:01:48 PM
As CGT @10% is agreed now from june,2010 onwards, it will have some positive aspects too e.g if on selling a share by stoploss below the buying price will incur zero CGT.Also FED,WHT will also be eliminated .....   :skeptic:
I dont consider it a bad news.
Seniors plz comment ....  :biggthumpup:
Title: Re: CGT -- Capital Gains Tax
Post by: Learner7 on February 22, 2010, 11:11:58 PM
As CGT @10% is agreed now from june,2010 onwards, it will have some positive aspects too e.g if on selling a share by stoploss below the buying price will incur zero CGT.Also FED,WHT will also be eliminated .....   :skeptic:
I dont consider it a bad news.
Seniors plz comment ....  :biggthumpup:

Thats right market will take it as +ve.
Title: Re: CGT -- Capital Gains Tax
Post by: myway on February 22, 2010, 11:12:36 PM
any notice from kse?
Title: Re: CGT -- Capital Gains Tax
Post by: Big Broker on February 22, 2010, 11:30:48 PM
Ali Siddiqui interviewed Akeel Karim Dhedi, Chairman of AKD Group.

AS: Now let’s move on towards some more news regarding the Stock Market, I mentioned in my intro about the Capital Gain Tax, we have seen a lot of speculations regarding this tax in the market and we have seen some statements by Mr. Shaukat Tareen as well. The exemption of this tax was till June 2010, now what do you think is going to happen? Previously every time there was news regarding the Capital gain Tax, the exemption was granted, what about now?

AKD: The Capital gain Tax is a tax which we do not wish to oppose but if we do end up opposing it, then there are certain reasons behind that. But because this matter has become so political now, I think it will be better if it just gets implemented this time round. I do not think the Government is going to make any significant recovery with the help of this tax but the Government will have to put an end to all the rest of the indirect taxes. Whatever the government is achieving with the current taxes right now, it might not be able to achieve the same once the Capital gain Tax gets implemented. Everyone is of the opinion that the capital market must grow, there are thousands of investors here and the number of listed companies here is still less so that is why we thought that this market needs to get promoted.

AS: According to some of the statements given by Mr. Shaukat Tareen, the agriculture and stock exchange will be brought under the tax in the near future, what would you like to say about that?

AKD: The taxes are already there and you can’t say that there aren’t. Like for example you have the trading tax, there is tax on any profit that companies make etc. What you are trying to say is that any person that invests and any profit that he earns must be brought under tax right? This can either be capital loss or capital gain, both things can occur. So what I mean to say is that if you pick up the records from the past three years or so you will see that the phases that the market has recovered from, I don’t think anyone could even have recovered from 0% tax then, on the whole even right now the market is in minus figures. So what I am trying to say is that this tax has become more political than it ever needed to be, and because of the fact that it has become so political, we think that the best way to get rid of this problem is to hope that the Capital Gain Tax gets implemented this time, that will put an end to all the issues.

AS: So you think it should get implemented and not exempted this time?

AKD: Yes, I think it should get implemented. Our basic purpose is to help make them understand that they will not be able to achieve anything significant with the help of this tax, nothing else.

AS: But indirectly you want it to get exempted right?

AKD: No, I think that the CVT and everything that already exists in the market right now, the Government will not be able to achieve anything more with this tax.

AS: Apart from this there was news in the circulation that Mr. Shaukat Tareen might hold a meeting with the members of the market, we saw that the market faced some pressure after this news, if they mange to define the mechanism of the market in a meeting or two, do you think the market will take a negative reaction against this?

AKD: I do not think that the implementation of the Capital gain Tax will have any significant affect on the market whatsoever.

 :shoaby:
Title: Re: CGT -- Capital Gains Tax
Post by: ::WASIF:: on February 23, 2010, 12:25:39 AM
Day traders k lia tou nuksaan hay per long term investor ko fiada hay na CGT, na WHT, CVT, FED good for long term investor this is good news  :banana: :banana: :banana: :banana: that is also indicated by AKD very frequently that Govt. will not be able to get more from the imposition of this tax
Title: Re: CGT -- Capital Gains Tax
Post by: ::WASIF:: on February 23, 2010, 12:26:54 AM
 :shoaby: :thumbsup_anim: :goodc: :banana: :speak_cool: ::)
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on February 23, 2010, 09:12:14 AM
Government and KSE reach accord on CGT: tax to be charged on two types of holdings

AHMED MALIK
KARACHI (February 23 2010): The government has decided to impose Capital Gain Tax on purchase of securities, to be charged on two types of holdings at the rate of 7.5 percent and 10 percent, with effect from July 1, 2010. It was decided at a meeting on Monday that the CGT will be charged on two types of holdings, at the initial rate of 10 percent for first two years, where the holding period is less than six months and @7.5 percent where the holding period exceeds six months but is less than 12 months.

Shaukat Tarin, who presided over the meeting declared that in order to promote savings and capital formation, CGT will not be charged where the holding period is over 12 months. It was also decided that the above mentioned rates will remain unchanged for two years.

After two years, an annual increment of 2.5 percent on the holding period of less than six months and 0.5 percent on the holding period of between six and 12 months will be implemented, brining the respective rates finally to 17.5 percent and 10 percent.

It was also decided that to promote capital formation, initial public offering of companies will be given tax incentives as long as a substantial portion of their capital is offered to the public. The minister appreciated the initiative of the Karachi Stock Exchange to discuss a long-term framework for CGT.

Federal Board of Revenue Chairman Sohail Ahmed, Member Tax Policy (Direct Tax) Israr Rauf and a delegation of Karachi Stock Exchange comprising MD Adnan Afridi, Member Director Dawood Jan Muhammad, leading KSE member Aqeel Karim Dedhi and others also attended the meeting.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on February 23, 2010, 09:22:16 AM
Capital Gains Tax on shares trade finally imposed New tax from July 1; Akeel Karim Dhedi says there is no need to panic
 
Tuesday, February 23, 2010
By Saad Hasan

KARACHI: In a decisive meeting, the government and directors of Karachi Stock Exchange (KSE) on Monday agreed to a 10 percent tax on profit investors make on short term trading in shares, participants told The News.

The Capital Gains Tax (CGT) will vary according to the holding period of stocks and the maximum 10 per cent has to be paid if shares are sold within six months after purchase.

The new tax regime to be imposed with next budget on securities purchased on and after July 1, 2010, would not be changed for next two fiscal years. Similarly, till June 30, 2012, the Capital Gain Tax will be charged at 7.5 per cent on securities held for more than six months.

Investors holding shares for more than a year are not liable to pay CGT, which will gradually increase on both tenures to 17.5 per cent and 10 per cent, respectively. From July 1, 2012, there will be an annual increment of 2.5 per cent on holding period of less than six months and 0.5 per cent on shares held between six and twelve months.

“To promote capital formation, initial public offering of the companies shall be given tax incentives as long as a substantial portion of their capital is offered to the public,” said a statement of Federal Board of Revenue (FBR) issued after the meeting.

Analysts say market should be ready to see a drastic reduction in volumes of shares traded at country’s largest stock exchange- KSE. “Market was looking at CGT rate of 5 per cent,” said Khurram Shahzad, head of research at Investcap. “A 10 per cent tax is too much!”

Brokers have for years resisted CGT arguing that listed firms already pay tax on profit while withholding tax is also charged on shares trading. However, Aqeel Karim Dhedhi, a leading stockbroker, was convinced that CGT would not scare away investors. “I personally think it would not affect the day traders. Volumes might go down for a while but that’s just it. There is no need to panic.”

 
Title: Re: CGT -- Capital Gains Tax
Post by: kse0007 on February 23, 2010, 12:04:15 PM
BIG BROKER  whay are you not making any new posts?
Title: Re: CGT -- Capital Gains Tax
Post by: Big Broker on February 23, 2010, 12:25:28 PM
BIG BROKER  whay are you not making any new posts?

While talking about possibilities of Nasim Beg joining the government as finance minister, Arif Habib said that Beg is a tailor-made person for the job and he can ably handle the economic challenges.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on February 24, 2010, 11:42:35 AM
Imposition of Capital Gains Tax – Discussions with KSE MD

While minor modalities for imposition of CGT are still to be finalized, it is
encouraging to note that 1) consensus has been formed amongst all
stakeholders and 2) announcement has been made well in advance of the
actual imposition. Moreover tax incentives for IPOs should bode well for
upcoming IPOs and should add depth (via increased listings) in domestic
bourses.
Based on our understanding of the press release and discussion with KSE
Managing Director, we discuss the implications of CGT on foreign investors,
mutual funds, fate of current transaction taxes and upcoming IPOs
In a press release issued recently, Federal Board of Revenue (FBR) finally announced
the imposition of Capital Gains Tax (CGT) on equity trading in the country, with effect
from July 1, 2010. While minor modalities are still to be finalized, it is encouraging to
note that 1) consensus has been formed amongst all stakeholders and 2)
announcement has been made well in advance of the actual imposition. Moreover tax
incentives for IPOs should bode well for upcoming IPOs and should add depth (via
increased listings) in domestic bourses.

to the details, the following CGT slabs will be applicable for the next two
years (i.e. July, 2010 to June, 2012):
• 10% for holding period of less than six months
• 7.5% for holding period of six to twelve months
• Exemption on holding period of over 12 months
• Exemption on securities purchased prior to July 1, 2010

After two years (starting July, 2012), the following annual increments will be applicable
on the aforementioned slabs:
• 2.5% pa on holding period of less than six months, with a cap of 17.5% (to be
achieved by July 2015)
• 0.5% pa on holding period of six to twelve months, with a cap of 10% (to be
achieved by July 2017)
It should also be noted that CGT will be payable to FBR on an annual basis and
brokerage houses or KSE will not act as a tax collection agent.

Other important details extracted from the press release and our discussions with
Karachi Stock Exchange (KSE) Managing Director, Mr. Adnan Afridi are discussed
hereunder.

CGT for Foreign Investors to be based on their respective currency gains
Though not finalized, we understand that CGT will be levied on foreign investors which
will be in-line with the aforementioned slabs, however tax calculation will be based on
their respective currency gains.

Trading activity for Mutual Funds likely to be CGT-exempt; unitholders/
investors to pay CGT on their gains on equity funds
While CGT regulation for mutual funds has not been finalized, we were told that trading
activity for mutual funds should remain tax-exempt. However any gains made by
investors of (both open-end and closed-end) equity funds on buy-sell of units will be
charged with CGT as per the standard slabs.

Fate of Current Transaction Taxes
Equity transactions in Pakistan are currently levied with three Withholding Taxes
(WHT) and one form of Federal Excise Duty (FED). As per our discussion with the MD,
we understand that the former two forms of WHT (applicable on equity brokers) will
become adjustable for their annual corporate tax and will no longer serve as a
minimum tax for brokerage houses.
WHT currently applicable at the rate of 0.01% on sale of shares will become adjustable
for capital gains tax to be paid by investors at the end of the year while FED of 0.02%
currently applicable on purchase of shares will be brought under the Value Added Tax
(VAT) regime.

Tax Incentive for New IPOs!
Initial Public Offerings (IPOs) launched after July 1, 2010 will be given tax incentives on
the basis of their free-float and paid-up capital. Tax rebate will vary from 10% to 30% of
their annual corporate tax rate of 35%.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on February 26, 2010, 10:25:06 AM
must read rpt on cgt by js http://www.4shared.com/file/230092086/f23f0ab2/js-Capital_gains_tax.html
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on April 21, 2010, 09:03:47 AM
Finance Ministry re-evaluating capital gains tax mechanism



Wednesday, April 21, 2010
By Shahnawaz Akhter

KARACHI: The Finance Ministry is re-evaluating the mechanism to implement the capital gains tax on shares’ trading, said sources in the Federal Board of Revenue (FBR).

In February, the Finance Ministry and members of the Karachi Stock Exchange (KSE) reached an agreement under which capital gains tax would be imposed from July 1, but the rate of tax was not disclosed.

However, after several meetings, members of Karachi bourse proposed 5 per cent rate on the holding of shares below six months, which will be increased to 10 per cent by 2014/15, said the sources.

The scenario has changed after Hafeez Sheikh assumed the charge as adviser to the prime minister on finance, said a tax official.

“The Finance Ministry is now considering eliminating all concessions, including agreed for the stock markets, to make the taxation system equitable,î said the official.

The stock exchange had proposed that the exemption of capital gains tax should be increased to 180 days or more for 2010/11 and 2011/12, 270 days or more for 2012/13 and 2013/14 and 360 days or more for 2014/15 on carry forward of capital losses.

After policy change in the Finance Ministry, the Federal Board of Revenue (FBR) is also seeking maximum benefit of revenue collection by implementing capital gains tax on shares trading, said the official.

Large Taxpayers Unit (LTU) Karachi, one of the major revenue collection arms of the revenue body, in its proposals for the Budget 2010/11, suggested that the initial rate of capital gains tax should be at a flat rate of 15 per cent and the period of retention should be less than 13 months. The assets held for longer durations should be allowed exemption, it was suggested.

At present, capital gains are exempted in the country, while the same are a major source of revenue around the world. Former finance minister Shaukat Tarin had categorically announced that the tax on stocks would be imposed from July 1, 2010 and several meetings were held with the members of the exchange to finalise the mechanism.

It is the need of the hour to tax capital gains, since its taxing will not only create a major additional source of revenue, but would discourage accumulation of wealth within the hands of a few people, said revenue body officials.

The capital gains was allowed exemption for healthy stock activities, keeping in view that it would contribute to improved investment, as well as encourage industrialisation, ultimately helping the national economy to grow at a faster pace.

“Unfortunately, the desired results do not appear. It is a fact that only a few brokerage houses have benefited out of trade in stocks in the past and the trend remains the same to-date,” according to the proposal.

The existing practice adopted at the stock exchanges of the country are more of trading and less investment-oriented, the revenue body officials said, adding, “Change of hand of shares during the day and before being recorded as final transaction at the Central Depository Company is in no way contributing to the real growth of the national economy.”

The brokerage houses have not diverted their respective earnings towards the process of industrialisation, but have further engaged themselves into the activities, which do not contribute much in the shape of taxes, said the officials.

“Exempting this source of income has led to concentration of wealth in a few hands, which is not only against the principal of welfare, but is also hurting the fabric of the society by creating disparity,” the proposal added.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on May 21, 2010, 09:50:50 AM
Investors demand CGT details

Shabbir Kazmi/ Nawaz Ali
KARACHI: Almost three months back, representatives of Karachi Stock Exchange, FBR and former finance minister Shaukat Tarin had agreed to impose capital gains tax on trading of equities. Ironically, during the period they badly failed in finalising modalities adding to the confusion of investors.
According to the available details, investors hardly understand how the tax would be collected. They have been told by the brokers that extension has been demanded, and probability of FBR agreeing to their demand is high.
The real point of concern is whether the investors will have to directly deposit the tax or the tax would be deducted at source by the brokers and deposited in the treasury. Experts say that the ambiguities are dampening investors' sentiments, which is evident from low turnover at the exchange in the recent past. Investors demand clear announcement from the government regarding imposition of this tax. They are of the view that if the government is serious in allowing the bourses to play the role of capital formation, more incentives should be offered. They say it is encouraging to note that government aims at making mandatory listing for the large private limited companies, then not only corporate tax rate should be reduced but exempting capital gains for another five years is the best incentive.
 
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on May 21, 2010, 11:56:49 AM
Some likely features of the CGT regime are:

Short term capital gains on all purchases made after July 1, 2010 would
be taxed in the range of 7.5-10% .

Tax rates would remain unchanged until FY12, with an annual increase of
2.5% for the less than 6 months category (capped at 17.5%) and yearly
increment of 0.5% for 1 year or less category, capped at 10%, then on.

Capital losses would be adjustable against capital gains and unabsorbed
losses can be carried forward up to a maximum 6 years.

No change in the tax structure for banks, while insurance companies
would be liable to pay CGT from July 1, 2010.

Mutual funds would be exempted from paying CGT; however, fund
holders would pay a tax on redemption.

???? Indexation to inflation for foreign investors is likely
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 03, 2010, 09:15:39 AM
CGT on bourses to be imposed in two slabs  
 
Thursday, June 03, 2010
By Javed Mirza

KARACHI: The modalities to impose capital gains tax (CGT) on stock markets from July 1 have been finalised. The tax would be imposed in two different slabs, sources told The News on Wednesday.

The tax would be imposed at the rate of 10 per cent on capital gains in shares held for less than six months and 7.5 per cent for holdings less than a year. However, positions held for over a year would be exempted from CGT, the sources said.

The brokers and investors registering capital gains on shares trading would have to file tax statement every quarter along with the advance tax, they said, adding that CGT would be adjustable.

Market analysts referring to their discussions with the tax officials said that the brokerage houses would withhold the tax on capital gains observed their clients and would file the tax statement mentioning the total collection.

Favouring the imposition of CGT, a leading stockbroker Aqeel Karim Dhedi said that this development would not have any significant impact on the stock exchange as the market had already absorbed the adjustment.

“CGT should be imposed now. This will open ways for taxing other sectors of the economy, such as agriculture, which are out of the tax net,” he said.

The government has projected revenue of around Rs4.2 billion through this introduction of the new tax.

“The CGT would be implemented from the coming fiscal year, but it would not serve the purpose, it was originally proposed for documentation of this sector of the economy,” said Khurram Schehzad, Head of Research at InvestCap Research.

“Since CGT would be withheld by the brokerage houses, there would be no accurate record of the transactions made by the traders. Hence, the desired ‘documentation’ would not be there.” The documentation was the issue that had created resistance against CGT on the part of the stockbrokers who had offered to the government to raise rate of the existing taxes instead of imposing CGT as according to initial proposal of CGT the entire sector would be properly documented, the sources said.
Title: Re: CGT -- Capital Gains Tax
Post by: M&M on June 03, 2010, 09:33:10 AM
maybe that's the reason behind the rally ..
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 03, 2010, 09:42:19 AM
CGT sans NTN, no way

Nawaz Ali
KARACHI: Rumors that National-Tax-Number (NTN) would not be required in collecting capital gains tax (CGT) circulated at the stock market Wednesday having some positive impact on the market but this seems to be baseless as investors would have to deposit CGT individually and NTN would definitely be needed for that.
Senior member KSE, Aqeel Karim Dhedhi said that how would it be possible that capital gain tax be collected without NTN. According to details some rumors were circulating in the market that high ranking government officials clearly ruled out any possibility for NTN. It should be noted that at present, brokers collect withholding tax (WH) on behalf of investors and deposit it to Federal Board of Revenue (FBR). However, CGT would be deposited individually by each investor therefore it would be necessary for them to have NTN. TFD analyst however suggested that government should involve National Clearing Company of Pakistan Limited (NCCPL) as an intermediary to keep investors safe from long procedure of documentation and it would be responsibility of NCCPL to calculate investor's capital gain on the yearly basis through UIN and deposit CGT on investor's behalf to the FBR.
 
Title: Re: CGT -- Capital Gains Tax
Post by: Heart Breaker on June 03, 2010, 09:59:32 AM
I have one question:-

1). 30 June say pehlay ki buying jo hum 1st july kay bad sell karain gay CGT us par bhi lagay ga ya jo bhi buying 1 July kay bad ho gi us par lagay ga?

Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 03, 2010, 10:16:55 AM
I have one question:-

1). 30 June say pehlay ki buying jo hum 1st july kay bad sell karain gay CGT us par bhi lagay ga ya jo bhi buying 1 July kay bad ho gi us par lagay ga?



cgt on buying after 1st july
Title: Re: CGT -- Capital Gains Tax
Post by: makenamjad on June 03, 2010, 01:50:25 PM
YAAR CAN ANYBODY EXPLAIN SIMPLY THIS TAX,,,,,
IF I BUY SOME SHARE @100000 AND SELL THEM WITHIN 2 MONTHS @110000 THEN HOW MUCH IT WILL BE TAXED?

PLZ TELL ME..............
Title: Re: CGT -- Capital Gains Tax
Post by: M&M on June 03, 2010, 02:48:33 PM
YAAR CAN ANYBODY EXPLAIN SIMPLY THIS TAX,,,,,
IF I BUY SOME SHARE @10000 AND SELL THEM WITHIN 2 MONTHS @110000 THEN HOW MUCH IT WILL BE TAXED?

PLZ TELL ME..............

1000 ka gain hua .. usska 10% kaat lo .. 10 Rs

[WHT CDC FED and Brokerage commissions will also apply]

agar VAT aaya to FED ki jaga VAT aajayega.

PS:
correct me if i'm wrong.

EDIT:
1 lakh ? 2 month mey [haha]
10,000 Rs kate gey phir ...
Title: Re: CGT -- Capital Gains Tax
Post by: invincible on June 03, 2010, 02:55:37 PM
YAAR CAN ANYBODY EXPLAIN SIMPLY THIS TAX,,,,,
IF I BUY SOME SHARE @10000 AND SELL THEM WITHIN 2 MONTHS @110000 THEN HOW MUCH IT WILL BE TAXED?

PLZ TELL ME..............

1000 ka gain hua .. usska 10% kaat lo .. 10 Rs

[WHT CDC FED and Brokerage commissions will also apply]  agar VAT aaya to FED ki jaga VAT aajayega.

PS:
correct me if i'm wrong.

EDIT:
1 lakh ? 2 month mey [haha]
10,000 Rs kate gey phir ...
 

Dear 1000 ka 10pc tou 100 bnta hai not 10 rupes. correct me if i m mistaken
Title: Re: CGT -- Capital Gains Tax
Post by: M&M on June 03, 2010, 03:00:19 PM
YAAR CAN ANYBODY EXPLAIN SIMPLY THIS TAX,,,,,
IF I BUY SOME SHARE @10000 AND SELL THEM WITHIN 2 MONTHS @110000 THEN HOW MUCH IT WILL BE TAXED?

PLZ TELL ME..............

1000 ka gain hua .. usska 10% kaat lo .. 10 Rs

[WHT CDC FED and Brokerage commissions will also apply]  agar VAT aaya to FED ki jaga VAT aajayega.

PS:
correct me if i'm wrong.

EDIT:
1 lakh ? 2 month mey [haha]
10,000 Rs kate gey phir ...
 

Dear 1000 ka 10pc tou 100 bnta hai not 10 rupes. correct me if i m mistaken

i'm assuming he is reffering to the value and not shares ..
Title: Re: CGT -- Capital Gains Tax
Post by: M&M on June 03, 2010, 03:04:23 PM
YAAR CAN ANYBODY EXPLAIN SIMPLY THIS TAX,,,,,
IF I BUY SOME SHARE @10000 AND SELL THEM WITHIN 2 MONTHS @110000 THEN HOW MUCH IT WILL BE TAXED?

PLZ TELL ME..............

1000 ka gain hua .. usska 10% kaat lo .. 10 Rs

[WHT CDC FED and Brokerage commissions will also apply]  agar VAT aaya to FED ki jaga VAT aajayega.

PS:
correct me if i'm wrong.

EDIT:
1 lakh ? 2 month mey [haha]
10,000 Rs kate gey phir ...
 

Dear 1000 ka 10pc tou 100 bnta hai not 10 rupes. correct me if i m mistaken

i'm assuming he is reffering to the value and not shares ..

oh yess .. sorry .. mey kuch aur samjha .. jaldi mey aik zero kha gaya - u'r rite ... 100 Rs ..
Title: Re: CGT -- Capital Gains Tax
Post by: invincible on June 03, 2010, 03:04:47 PM
 :goodc:
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 04, 2010, 09:14:13 AM
The FBR has proposed capital gains tax with different rates ranging from 7.5 per cent on stock market shares to 17.5 per cent for holding shares depending on timeframe. “The imposition of capital gains tax on stock market share is expected to yield around Rs5 to 6 billion during the first financial year 2010-11,” a senior official of the FBR confirmed to this scribe.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 05, 2010, 07:16:49 PM

cgtax imposed as announced

6 months holding 10%
after 6 months to 1 year 7.5%
after 1 year no cgtax
Title: Re: CGT -- Capital Gains Tax
Post by: axl_rose on June 05, 2010, 07:47:29 PM
Futures pe cgt lagay ga ?????
Title: Re: CGT -- Capital Gains Tax
Post by: Big Broker on June 05, 2010, 08:43:54 PM
too much confusion at the moment. wait for clarity !
Title: Re: CGT -- Capital Gains Tax
Post by: Research Doctor on June 05, 2010, 09:02:06 PM
stock market ko unhi logon ne barbaad kernay ka bera uthaya jo khud KSE kay big heads rahay hain i.e., shoukat tareen and Hafeez shaikh....laanat hai in per. In ko pata hona chahye tha ke there r very few  how have net and continuous earnings from this business. Actually this is not business, b/c a business has some strong footing but stock market has none. this is something like luck test that every one wanting money likes to play.........and evenually fails.  Now if u succeed in making 10 profitable trades and pay tax for them, and for 90 trades u gain loss. so there shuold be a capital loss refund system too....or the CGT should be on over-all calculation of whole year trades. I mean if a person has a net income from overall trading, then he should be taxed, just like income tax.
Secondly, if the collection mechanism is like income tax returns, it will badly affect the common man involved in stocks, as he will have to maintain his full record keeping all legal aspects. As a result, turn over will reduce to the extreme. But if it is cut in the same way as brokerage+CVT+FED, then nope as every one pays these expenses for every trade, so he will feel easy.....just a simple calculation if there is 12 paisa per share expense, then we shall adjust is as 13-14-15 or 20 paisa per share expense......it will be easy to digest.
Lets see the mechanism of implementation............in kan_aron ko lootna aata hai......maan gai..........agriculture ko nahi tax kia.....
Title: Re: CGT -- Capital Gains Tax
Post by: wasi on June 05, 2010, 09:08:20 PM
_ = j  :console:
Title: Re: CGT -- Capital Gains Tax
Post by: invincible on June 05, 2010, 09:56:45 PM
Doctor bhai calm down. Dont boil ur blood. CGt has been expected for many days. So take it easy, mkt has already discounted it as said by arif habib. Vat is also postponed till oct. so just chill  :shoaby:
Title: Re: CGT -- Capital Gains Tax
Post by: mamu jee on June 05, 2010, 10:02:57 PM
stock market ko unhi logon ne barbaad kernay ka bera uthaya jo khud KSE kay big heads rahay hain i.e., shoukat tareen and Hafeez shaikh....laanat hai in per. In ko pata hona chahye tha ke there r very few  how have net and continuous earnings from this business. Actually this is not business, b/c a business has some strong footing but stock market has none. this is something like luck test that every one wanting money likes to play.........and evenually fails.  Now if u succeed in making 10 profitable trades and pay tax for them, and for 90 trades u gain loss. so there shuold be a capital loss refund system too....or the CGT should be on over-all calculation of whole year trades. I mean if a person has a net income from overall trading, then he should be taxed, just like income tax.
Secondly, if the collection mechanism is like income tax returns, it will badly affect the common man involved in stocks, as he will have to maintain his full record keeping all legal aspects. As a result, turn over will reduce to the extreme. But if it is cut in the same way as brokerage+CVT+FED, then nope as every one pays these expenses for every trade, so he will feel easy.....just a simple calculation if there is 12 paisa per share expense, then we shall adjust is as 13-14-15 or 20 paisa per share expense......it will be easy to digest.
Lets see the mechanism of implementation............in kan_aron ko lootna aata hai......maan gai..........agriculture ko nahi tax kia.....
Mr Research Doctor i agree with you
 :lazy2:
Title: Re: CGT -- Capital Gains Tax
Post by: Research Doctor on June 05, 2010, 10:04:22 PM
Doctor bhai calm down. Dont boil ur blood. CGt has been expected for many days. So take it easy, mkt has already discounted it as said by arif habib. Vat is also postponed till oct. so just chill  :shoaby:


chil hi chil hai sir jee.......but mode of implementation per buht tahffazaat hain............i m worried abt turn over, not on up-down. can u find info abt mode of implementation.
baqi budget buht behtar hai siwae CGT ke............aur hamari tu pays bhi mashaallah increase ho rahi hain........per stock ke nuqsaan pooray kernay tak market main rehna tu hai....is liye ghussa aa raha hai............  
Title: Re: CGT -- Capital Gains Tax
Post by: Research Doctor on June 05, 2010, 10:06:06 PM

Mr Research Doctor i agree with you
 :lazy2:

thanx Mamu. apni rai bhi dain na....specially abt mode of implementation
Title: Re: CGT -- Capital Gains Tax
Post by: blue chip on June 05, 2010, 10:17:56 PM
CGT will be filed like tax return........capital losses will be adjusted frm capital gain n rest will be taxed accordingly ..........fed n cvt is now will not be charged frm ist of july............cgt will not b charged on incomplete transaction before ist july(transaction=buy n sell).........return will be filed every month by brokerage house ntn will not be required



Mr Research Doctor i agree with you
 :lazy2:

thanx Mamu. apni rai bhi dain na....specially abt mode of implementation
Title: Re: CGT -- Capital Gains Tax
Post by: mamu jee on June 05, 2010, 10:20:16 PM
VALUE ADED TAX has temporarily delay for some time BUT SALES TAX is going to increase by Govt   



    31 may  ko Latest  news  ka page number 130  pr  sab sa pahly ma na yah news break ke   thhee :rtfm: :dunno: :rtfm:
Title: Re: CGT -- Capital Gains Tax
Post by: mamu jee on June 05, 2010, 10:30:49 PM

Mr Research Doctor i agree with you
 :lazy2:

thanx Mamu. apni rai bhi dain na....specially abt mode of implementation
Doctor bhaee agar personally ma apny rai du ga tu sab yahee kahay gae k Mamu na MCB ma short sell kea howa ha Es lea neative rai da raha ha,Es lea khamooshe he betar ha.But in coming days Jin loogoo na CGT ko except kea thha woh  ab apny Ezat bachaany k ley apny  stocks ko Green kr k  market ma CGT ka Negative impect ko positively  show  karny ke koshes  karay gae.I think aap mara Eshaara samajh gay hoom ga k ma kin loogoo ke baat kar raha hoon. :lazy2:
Title: Re: CGT -- Capital Gains Tax
Post by: Research Doctor on June 05, 2010, 10:31:18 PM
CGT will be filed like tax return........capital losses will be adjusted frm capital gain n rest will be taxed accordingly ..........fed n cvt is now will not be charged frm ist of july............cgt will not b charged on incomplete transaction before ist july(transaction=buy n sell).........return will be filed every month by brokerage house ntn will not be required


aap ne mode buht acha expalin kia. aur is main jo info hai woh kaafi +ve hai, when losses are also counted and net income is taxed, then no problem. and no cvt and fed, then thats fine. zara BP kam howa hai. Laikin yeh batain ke brokers sirf hisaab-kitaab hi karain gay ya hamaray account main se amount deduct ker ke deposit bhi karwain gay?
Title: Re: CGT -- Capital Gains Tax
Post by: mamu jee on June 05, 2010, 10:35:14 PM
CGT will be filed like tax return........capital losses will be adjusted frm capital gain n rest will be taxed accordingly ..........fed n cvt is now will not be charged frm ist of july............cgt will not b charged on incomplete transaction before ist july(transaction=buy n sell).........return will be filed every month by brokerage house ntn will not be required


aap ne mode buht acha expalin kia. aur is main jo info hai woh kaafi +ve hai, when losses are also counted and net income is taxed, then no problem. and no cvt and fed, then thats fine. zara BP kam howa hai. Laikin yeh batain ke brokers sirf hisaab-kitaab hi karain gay ya hamaray account main se amount deduct ker ke deposit bhi karwain gay?

Tamaam responsibility hamary brokers ke ha,Ab hum sa tu woh tamaam texes wasool kr lain ga,Aaghy unky marzee ha k woh Sirkaar  ko kitna show karwaty hain, Doctor  :lazy2: bhaee ab neend bohat aa rahy ha,Subho namaaz sa pahly ut kr walk b karna ha,Es lea ma tu soony ja raha hoon,Good Night :lazy2:
Title: Re: CGT -- Capital Gains Tax
Post by: Research Doctor on June 05, 2010, 10:39:08 PM

Doctor bhaee agar personally ma apny rai du ga tu sab yahee kahay gae k Mamu na MCB ma short sell kea howa ha Es lea neative rai da raha ha,Es lea khamooshe he betar ha.But in coming days Jin loogoo na CGT ko except kea thha woh  ab apny Ezat bachaany k ley apny  stocks ko Green kr k  market ma CGT ka Negative impect ko positively  show  karny ke koshes  karay gae.I think aap mara Eshaara samajh gay hoom ga k ma kin loogoo ke baat kar raha hoon. :lazy2:
[/quote]

mamu u r cute short-seller. i really appreciate u. waisay banks ke baaray main jo controvercial tax laga hai, agar market ya kuch shares green bhi howe tu bhi banks aur specially bigger banks red hi hongay....is liye aap MCB ki fikar nahi kerain.
Baqi kon nahi janta AH group ki saari game hai......... who chalay ga green-o-green...... lets see
Title: Re: CGT -- Capital Gains Tax
Post by: blue chip on June 05, 2010, 10:39:38 PM
CGT will be filed like tax return........capital losses will be adjusted frm capital gain n rest will be taxed accordingly ..........fed n cvt is now will not be charged frm ist of july............cgt will not b charged on incomplete transaction before ist july(transaction=buy n sell).........return will be filed every month by brokerage house ntn will not be required

agar main finance minister hota tu aisa he karta lets c ye kia kartay hain :-) hope u dun mind...........bp ko dubara upper janay aur tenoumin lo 25 mg ki main b wohi laita hun..........aur choletrol karab ho jain tu jumpid 600 mg :-)


aap ne mode buht acha expalin kia. aur is main jo info hai woh kaafi +ve hai, when losses are also counted and net income is taxed, then no problem. and no cvt and fed, then thats fine. zara BP kam howa hai. Laikin yeh batain ke brokers sirf hisaab-kitaab hi karain gay ya hamaray account main se amount deduct ker ke deposit bhi karwain gay?

Title: Re: CGT -- Capital Gains Tax
Post by: mamu jee on June 05, 2010, 10:41:01 PM
Doctor bhaee agar personally ma apny rai du ga tu sab yahee kahay gae k Mamu na MCB ma short sell kea howa ha Es lea neative rai da raha ha,Es lea khamooshe he betar ha.But in coming days Jin loogoo na CGT ko except kea thha woh  ab apny Ezat bachaany k ley apny  stocks ko Green kr k  market ma CGT ka Negative impect ko positively  show  karny ke koshes  karay gae.I think aap mara Eshaara samajh gay hoom ga k ma kin loogoo ke baat kar raha hoon. :lazy2:

mamu u r cute short-seller. i really appreciate u. waisay banks ke baaray main jo controvercial tax laga hai, agar market ya kuch shares green bhi howe tu bhi banks aur specially bigger banks red hi hongay....is liye aap MCB ki fikar nahi kerain.
Baqi kon nahi janta AH group ki saari game hai......... who chalay ga green-o-green...... lets see
[/quote] :thanks: :lazy2:
Title: Re: CGT -- Capital Gains Tax
Post by: Research Doctor on June 05, 2010, 10:46:44 PM
thank u mamu and blue chip bro. U both have answered all the questions arising about cgt. Now i m satisfied. I also hope ke woh sab members jo in posts ko parh lain gay, woh bhi sab kuch samajh sakain gay. Thank u both of u
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 05, 2010, 11:29:38 PM

turnover tu definately decrease hon ge. people will like to hold shares longer

i dont think ke tax deduction brokers karain ge
investors traders will have to submit tax returns but
 
jo losses last years mey howe hain un ka kya ho ga ?
kya woh bhi future ke profits ke sath adjust hon ge ?
Title: Re: CGT -- Capital Gains Tax
Post by: 007 on June 05, 2010, 11:40:47 PM
returnay tou agg income tax denay walay nahin bahartay

no one will bother,

Title: Re: CGT -- Capital Gains Tax
Post by: Big Broker on June 05, 2010, 11:46:57 PM
http://www.4shared.com/document/pmJB_8Nl/Investment_Strategy_-_Pre-budg.html

Quote
What needs to be clarified?
While the basic structure of capital gains tax has been discussed in early Feb,
follow up details have been scarce. Some of the modalities requiring clarification
are:
Treatment of international investors
An important proposal by the KSE from international investor perspective is that
capital gains and losses for non-residents should be calculated in the currency of
investment. This should avoid the disadvantage in case of rupee devaluation,
which could result in investor being liable to capital gains tax despite having made
losses in their home currency.
Accounting treatment – FIFO/ LIFO/ Weighted average
Given that the basic structure entails a time bound tax and provides exemption to
inventory carried on June 30th, the accounting treatment also needs to be
clarified from the perspective of both local and international investors to ensure
seamless and dispute free implementation.
Potential impact if implemented
Unless details of the capital gains tax are shared in the interim, the
implementation of capital gains tax in the budget is likely to be greeted with some
uncertainty:
???? Certain segment of retail investors who remain wary of documentation and
new taxes in the initial days would curtail their activity until they come to
terms with the process and drag market volumes (retail has over 50% share
in daily volumes).
???? International investors would be interested in understanding the modalities of
the tax and whether the tax will adjust for exchange losses before taking a
decision on altering their trading strategies.
???? Long term institutional investors could (not a high probability however) look to
build up positions between the budget and June 30th to ensure that their
investments are not subjected to tax as and when they sell in the future.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 05, 2010, 11:49:37 PM
quarterly returns will have to submitted as per the finance bill
Title: Re: CGT -- Capital Gains Tax
Post by: Faraz Khan on June 05, 2010, 11:53:52 PM
farzooq why quarterly.  It should be yearly. What about someone who invested 10 lacs in jan 2010 and made capital gains of 2 lacs and withdraw the profit. Now he is holding shares and his account is down to 6 lacs and now if he sells and buys and brings his account upto 7 lacs and withdraws that 1 lac. He is left with 6 lacs in his account wth no shares outstanding. Would CGT apply????????????
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 05, 2010, 11:56:26 PM
Advance tax on capital gains on sale of securities, shall be as follows, namely:-
(a) the taxpayer shall pay advance tax on quarterly basis as per the following schedule and rates, namely:-
S. No Period Rate of advance tax. Liability
(1)                    (2)                      (3)

1.Where holding period of a security is less than six months. 2%
2.Where holding period of a security is more than six months but less than twelve months.1.5%? ;

and
(b) advance tax shall be payable by the taxpayer to the Commissioner within seven days after the close of each quarter.

Title: Re: CGT -- Capital Gains Tax
Post by: Big Broker on June 05, 2010, 11:58:00 PM
farzooq why quarterly.  It should be yearly. What about someone who invested 10 lacs in jan 2010 and made capital gains of 2 lacs and withdraw the profit. Now he is holding shares and his account is down to 6 lacs and now if he sells and buys and brings his account upto 7 lacs and withdraws that 1 lac. He is left with 6 lacs in his account wth no shares outstanding. Would CGT apply????????????
:laugh:
 :clap1:

Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 05, 2010, 11:59:37 PM
Capital Gains on Sale of Securities
The rate of tax to be paid under section 37A shall be as follows-
S.No. Period.Tax Year.Rate of tax.
(1)     (2)         (3)        (4)
1.Where holding period of a security is less than six months.
2010 2011 2012 2013 2014
10% 10% 12.5% 15% 17.5%

2.Where holding period of a security is more than six months but less than twelve months.
2010 2011 2012 2013 2014 2015
7.5% 8% 8.5% 9% 9.5% 10%
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 06, 2010, 12:05:00 AM
after section 37, the following new section shall be inserted, namely:-
?37A. Capital gains on sale of securities.-

(1) Subject to this Ordinance, a gain arising on the sale of securities shall be chargeable to tax at the rate specified in Division VII of Part I of the First Schedule;
Provided that this sub-section shall not apply if the securities are held for a period of more than twelve months;
Provided further that the provisions shall not apply to a banking company.

(2) In this section ?securities? means shares of a public company, vouchers of Pakistan Telecommunication Corporation, Modaraba Certificates or instruments of redeemable capital.

(3) The amount of gain under this section shall be treated as a separate block of income.?;
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 06, 2010, 12:09:38 AM
after section 37, the following new section shall be inserted, namely:-
?37A. Capital gains on sale of securities.-

(1) Subject to this Ordinance, a gain arising on the sale of securities shall be chargeable to tax at the rate specified in Division VII of Part I of the First Schedule;
Provided that this sub-section shall not apply if the securities are held for a period of more than twelve months;
Provided further that the provisions shall not apply to a banking company.

(2) In this section ?securities? means shares of a public company, vouchers of Pakistan Telecommunication Corporation, Modaraba Certificates or instruments of redeemable capital.

(3) The amount of gain under this section shall be treated as a separate block of income.?;


Capital Gains on Sale of Securities
The rate of tax to be paid under section 37A shall be as follows-
S.No. Period.Tax Year.Rate of tax.
(1)     (2)         (3)        (4)
1.Where holding period of a security is less than six months.
2010 2011 2012 2013 2014
10% 10% 12.5% 15% 17.5%

2.Where holding period of a security is more than six months but less than twelve months.
2010 2011 2012 2013 2014 2015
7.5% 8% 8.5% 9% 9.5% 10%

Advance tax on capital gains on sale of securities, shall be as follows, namely:-
(a) the taxpayer shall pay advance tax on quarterly basis as per the following schedule and rates, namely:-
S. No Period Rate of advance tax. Liability
(1)                    (2)                      (3)

1.Where holding period of a security is less than six months. 2%
2.Where holding period of a security is more than six months but less than twelve months.1.5%? ;

and
(b) advance tax shall be payable by the taxpayer to the Commissioner within seven days after the close of each quarter.


Title: Re: CGT -- Capital Gains Tax
Post by: 007 on June 06, 2010, 12:37:50 AM
advance tax??

calculated how??

so you pay tax whether or not u sell???
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 06, 2010, 04:10:01 AM
 :bangin: advance tax ki calculation uppar di tu howi hai
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 06, 2010, 04:38:08 AM
farzooq why quarterly.  It should be yearly. What about someone who invested 10 lacs in jan 2010 and made capital gains of 2 lacs and withdraw the profit. Now he is holding shares and his account is down to 6 lacs and now if he sells and buys and brings his account upto 7 lacs and withdraws that 1 lac. He is left with 6 lacs in his account wth no shares outstanding. Would CGT apply????????????
:laugh:
 :clap1:


there is no cgt on trades before 1st july 2010
Title: Re: CGT -- Capital Gains Tax
Post by: Tezihunt on June 06, 2010, 08:40:40 AM
:bangin: advance tax ki calculation uppar di tu howi hai

Farzooq Bhai!
How you see impact of Advance Tax
It looks that even the people who will intend to hold for more than one year...will be subjected to quarterly deductions of advance tax. which they will claim in refund later on. Is it so!
Title: Re: CGT -- Capital Gains Tax
Post by: fasee on June 06, 2010, 10:05:18 AM
The most logical reactio to CGT wud be

1) reduction in volumes
2) sidelining of day traders
3) choppy movements...as jo kal 10 paisay ka diffrential pe maal ghumta tha...ab 15 paisay ke difrence ke bagair mal nahee ghumai ga...

so i guess brokerage firms wud be worst hit....due t reduction in brokerage.....banks and funds are usulay long term holders..so they wont be bothered that much.

kiya kehtay hian boss :skeptic:
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 06, 2010, 10:24:27 AM
Budget impact would be neutral for bourses: analysts
RECORDER REPORT
KARACHI (June 06 2010): Analysts say the overall impact of budget announcement for FY11 would be neutral for stock market. "Although the government has imposed Capital Gains Tax (CGT) on shares trading in the budget 2010-11, however it was as per expectations and agreement between the government and market players," they added.

The CGT would be charged at the rate of 10 percent if shares are sold within 6 months and 7.5 percent if sold between 6 to 12 months, while no tax would be imposed on above 12 months holdings. "Though the market is expecting CGT, however, this will affect volumes as large portion of individual trading (55-60 percent share) is not declared to tax authorities somehow reduced trading volumes," an analyst at Topline Securities said.

He said the overall theme of the budget FY11 is to sustain the fragile economic recovery with some pro-poor measures at the expense of new taxes, increase in rates and elimination of subsidies. The main task for the new finance minister is to achieve the set goals of revenue enhancement and containing expenditure in the new fiscal year. The key risks to the economy for FY11 are quantum of energy shortages, security situation and external flows.

On the flip side, the FY11 budget has nothing exciting for business community, except for government decision to defer the controversial VAT for three months. He said one-year tax rebate of 5 percent of tax payable on companies who would be listed at stock exchange is a positive step to encourage more listings. The 10 percent tax credit on BMR cost for listed companies is also an incentive for listed companies.

Ahsan Mehanti at Shehzad Chamdia Securities was also of the view that the overall impact of budget 2010-11 would be neutral for the stock market. The imposition of CGT was as per expectations while no other major change was announced in the budget speech, he added. Khurram Schehzad said the overall impact of the budget on stock market would be neutral as no major change is there. He said the reduction in corporate tax from 35 percent to 30 percent is a positive step and will encourage new listings at the share market.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 06, 2010, 10:26:02 AM
Share market seen prepared to brace capital gains tax  
 
Budget people, business-friendly, brokers say

Sunday, June 06, 2010
By Javed Mirza

KARACHI: Leading stock brokers said on Saturday that the share market remains ready to brace the capital gain tax, which has been finally been imposed in the federal 2010/11 (July-June) budget after an exemption of more than six years.

The market has already factored in the imposition of CGT, which has been imposed in two different slabs on the shares trading, they said.

The tax would be imposed at the rate of 7.5 per cent on capital gains on the shares held for less than one year, but more than six months. Gains on the shares held for less than six months would be subject to tax at the rate of 10 per cent.

Arif Habib Group Chairman Arif Habib termed the budget “people and business-friendly”.

“The new structure for the stock market is as per the market expectations,” he said. “Besides, the deferment of the value-added tax till October is also a good decision. This budget is favourable for the market and the business environment of the country overall.”

Aqeel Karim Dhedi, a leading member of the Karachi Stock Exchange (KSE), said that the imposition of CGT on the stock market was inevitable. “It is in the interest of the economy as this would open way to tax other sectors, which are out of the net such as agriculture.”

He said that there would be no significant impact on the stock market as the imposition of this tax had already been factored in. “The rate and slabs are as per the market expectations and the participants are ready for it.” Shahzad Chamdia, another member of the KSE, said that there would be a positive impact on the stock market of the new budget.

“The capital gains tax had to be imposed and the market was ready for this development,” he said. He echoed other brokers saying that the negative impact of CGT had already been discounted. “As the uncertainty is now over the market would start performing.”
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 06, 2010, 10:27:22 AM
Brokers in quandary over modalities

Imposition of CGT
Nawaz Ali

KARACHI: Imposition of capital gain tax is no surprise and the proposed rates are in line with experts forecast. However, calculation of tax will not be easy. Imposition of 10 per cent tax on less than six month shareholding can bring down the daily trading volume significantly low and affect the income of brokerage houses. The scanty details also do not show how a capital loss would be treated, said an analyst.

Some leading brokers say though government has finally imposed capital gain tax (CGT) on the stock market but there are many uncertainties yet to be cleared. However, they say that imposition of CGT is already discounted by the market and we would not see any major reaction. According to details, 10 per cent CGT has been imposed on shares sold within six months which would be increased to 17.5 per cent by 2014 while 7.5 per cent CGT has been imposed on shares sold within one year but more than six months and it will increase to 10 per cent by 2015. However, there will be no CGT on shares sold after one year. There is still uncertainty among the brokers that whether other taxes would be removed before the imposition of CGT or not while the modalities of how the tax would be collected are still not clear. Chairman Arif Habib Group, Arif Habib told The Financial Daily that if the CGT is imposed while honouring other commitments then there wouldn't have any major impact on the market as it has already priced on this score. However if other commitments are not honored then it would be disastrous for the market.
It should be noted that an agreement took place among the former finance minister Shaukat Tarin, Federal Board of Revenue (FBR) and stock market representatives in February this year where it was decided to impose CGT while the withholding tax (WHT) on sale and purchase of shares would be made adjustable.

Dawood Jan Mohammad, Director Karachi stock exchange said that if CGT is not imposed as per the agreement then we would not accept it. Another member of the exchange Kamran Abbas said that CGT was already discounted by the market therefore it wouldn't have any major impact while the overall budget would have a neutral to positive impact on the market. APP adds: Director Karachi Stock Exchange Yasin Lakhani has said on Saturday that capital gain tax will affect the capital market and reduce share values of government's own listed companies.
Commenting on the Budget 2010-11, he said that government would not be able to get sufficient amount from 10 per cent capital gain tax on scrips and instead disturb the market. He said that 35 per cent of the total listed shares on stock exchanges belonged to the government and this tax will reduce their values. Director KSE, Zafar Moti also opposed the imposition of capital gain tax and said this would make investors shy away from Pakistani capital market. "I have the estimates that they will not be able to generate more than Rs500 million through this tax", he added. - APP

 

Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 06, 2010, 11:11:12 AM
Tax on capital gains accruing on account of holdings of stocks/shares/securities for six-months or less is proposed @ 10 percent, while holdings of stocks/shares/securities exceeding six-months is proposed @ 7.5 percent. However no tax has been proposed on such capital gains arising held for a period exceeding 12 months. The withdrawal of exemption from tax on capital gains on sale of shares, stocks and securities from July 1, 2010 will generate an amount of Rs 5 billion.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 06, 2010, 11:15:47 AM
The most logical reactio to CGT wud be

1) reduction in volumes
2) sidelining of day traders
3) choppy movements...as jo kal 10 paisay ka diffrential pe maal ghumta tha...ab 15 paisay ke difrence ke bagair mal nahee ghumai ga...

so i guess brokerage firms wud be worst hit....due t reduction in brokerage.....banks and funds are usulay long term holders..so they wont be bothered that much.

kiya kehtay hian boss :skeptic:

Not a single newspaper has given any details on cgtax
yes the volumes would drop as people will want to hold longer



Title: Re: CGT -- Capital Gains Tax
Post by: M&M on June 06, 2010, 12:17:55 PM
The most logical reactio to CGT wud be

1) reduction in volumes
2) sidelining of day traders
3) choppy movements...as jo kal 10 paisay ka diffrential pe maal ghumta tha...ab 15 paisay ke difrence ke bagair mal nahee ghumai ga...

so i guess brokerage firms wud be worst hit....due t reduction in brokerage.....banks and funds are usulay long term holders..so they wont be bothered that much.

kiya kehtay hian boss :skeptic:

Not a single newspaper has given any details on cgtax
yes the volumes would drop as people will want to hold longer


"People will ignore their misfortunes and their interests when they are in competition with their pleasures." ~French Proverb
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 06, 2010, 12:25:47 PM
The brokers and investors registering capital gains on shares trading would have to file tax statement every quarter along with the advance tax, they said, adding that CGT would be adjustable.

Capital losses would be adjustable against capital gains and unabsorbed
losses can be carried forward up to a maximum 6 years.

No change in the tax structure for banks, while insurance companies
would be liable to pay CGT from July 1, 2010.

Mutual funds would be exempted from paying CGT; however, fund
holders would pay a tax on redemption.
Title: Re: CGT -- Capital Gains Tax
Post by: Papa Jee on June 06, 2010, 12:26:29 PM
The most logical reactio to CGT wud be

1) reduction in volumes
2) sidelining of day traders
3) choppy movements...as jo kal 10 paisay ka diffrential pe maal ghumta tha...ab 15 paisay ke difrence ke bagair mal nahee ghumai ga...

so i guess brokerage firms wud be worst hit....due t reduction in brokerage.....banks and funds are usulay long term holders..so they wont be bothered that much.

kiya kehtay hian boss :skeptic:

Not a single newspaper has given any details on cgtax
yes the volumes would drop as people will want to hold longer


"People will ignore their misfortunes and their interests when they are in competition with their pleasures." ~French Proverb


 :goodc:
Title: Re: CGT -- Capital Gains Tax
Post by: fasee on June 06, 2010, 01:26:13 PM


Mutual funds would be exempted from paying CGT; however, fund
holders would pay a tax on redemption.


es pcket say jai ya uss pocket say...ultimatley consumer..yani investor tu burdned hu hi giya na.....what diffrence it maes if i pay my taxdirectly or my mutal fund is paying for me....investor gets screwed either way...:D
Title: Re: CGT -- Capital Gains Tax
Post by: Faraz Khan on June 06, 2010, 02:31:29 PM
I have a question. from what date will my capital be determined as principal capital. What i mean to ask is if i had invested my capital of 10 lacs in feb 2010 and and today's closing price of shares, it is down to 7 lacs , would i be liable to show capital losses in my trades after 1t July 2010 or not?
Title: Re: CGT -- Capital Gains Tax
Post by: jaz on June 06, 2010, 02:54:23 PM
Just see it from another angle. If i have spare liquidity and i intend parking it in equity market what is more favourable for me. To do it before 1st jul or after that. given the fact that holdings bought before 1st jul are not taxed and given the comfortable prices of shares i think every tom dick and harry with intention of investing would like to buy before the CGT gets in force. This buying can lead to a rally in equity mkts before 30 jun. Also see that fy end is also approaching and mark to mkt exercise or book adjustments will be carried out by companies, banks and MFs and they will like to get better prices before the CGT gets imposed. Moreover shares bought before 1st jul and sold after that will not be taxed. Given all this i see mkt rallying in jun after some knee jerk reaction next week.  :arrowhead:
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 06, 2010, 03:33:04 PM
I have a question. from what date will my capital be determined as principal capital. What i mean to ask is if i had invested my capital of 10 lacs in feb 2010 and and today's closing price of shares, it is down to 7 lacs , would i be liable to show capital losses in my trades after 1t July 2010 or not?
1st july 2010
Title: Re: CGT -- Capital Gains Tax
Post by: M&M on June 06, 2010, 05:35:44 PM
Just see it from another angle. If i have spare liquidity and i intend parking it in equity market what is more favourable for me. To do it before 1st jul or after that. given the fact that holdings bought before 1st jul are not taxed and given the comfortable prices of shares i think every tom dick and harry with intention of investing would like to buy before the CGT gets in force. This buying can lead to a rally in equity mkts before 30 jun. Also see that fy end is also approaching and mark to mkt exercise or book adjustments will be carried out by companies, banks and MFs and they will like to get better prices before the CGT gets imposed. Moreover shares bought before 1st jul and sold after that will not be taxed. Given all this i see mkt rallying in jun after some knee jerk reaction next week.  :arrowhead:

It was time someone wrote that ...  :goodc:
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 06, 2010, 05:59:31 PM
I have a question. from what date will my capital be determined as principal capital. What i mean to ask is if i had invested my capital of 10 lacs in feb 2010 and and today's closing price of shares, it is down to 7 lacs , would i be liable to show capital losses in my trades after 1t July 2010 or not?
1st july 2010

principal capital would be the value of shares as per 1st july
previous losses wont be adjusted with profits after 1st july
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 06, 2010, 06:05:11 PM
Just see it from another angle. If i have spare liquidity and i intend parking it in equity market what is more favourable for me. To do it before 1st jul or after that. given the fact that holdings bought before 1st jul are not taxed and given the comfortable prices of shares i think every tom dick and harry with intention of investing would like to buy before the CGT gets in force. This buying can lead to a rally in equity mkts before 30 jun. Also see that fy end is also approaching and mark to mkt exercise or book adjustments will be carried out by companies, banks and MFs and they will like to get better prices before the CGT gets imposed. Moreover shares bought before 1st jul and sold after that will not be taxed. Given all this i see mkt rallying in jun after some knee jerk reaction next week.  :arrowhead:

y would banks mutual funds companies foreigners buy or start a rally before 1st july
as they wont be able to find buyers after 1st july and why would they buy to sell in loss afterwards ???


 
Title: Re: CGT -- Capital Gains Tax
Post by: 007 on June 06, 2010, 06:40:18 PM
coz profits will be tax free :bangin:
Title: Re: CGT -- Capital Gains Tax
Post by: jaz on June 06, 2010, 07:53:52 PM
Just see it from another angle. If i have spare liquidity and i intend parking it in equity market what is more favourable for me. To do it before 1st jul or after that. given the fact that holdings bought before 1st jul are not taxed and given the comfortable prices of shares i think every tom dick and harry with intention of investing would like to buy before the CGT gets in force. This buying can lead to a rally in equity mkts before 30 jun. Also see that fy end is also approaching and mark to mkt exercise or book adjustments will be carried out by companies, banks and MFs and they will like to get better prices before the CGT gets imposed. Moreover shares bought before 1st jul and sold after that will not be taxed. Given all this i see mkt rallying in jun after some knee jerk reaction next week.  :arrowhead:


y would banks mutual funds companies foreigners buy or start a rally before 1st july
as they wont be able to find buyers after 1st july and why would they buy to sell in loss afterwards ???


 
Good question. Simple psychology. When mkt starts coming down , fear drives the sentiments and once it rallies, emotions are driven by greed. i will definately buy even after 1 jul if i think that i am able to sell my holdings in profit. i will gladly share my profit with govt. In other words GREED would never diminish in this business.
ps. Sanity seldom prevails in equity mkts.  :(
Title: Re: CGT -- Capital Gains Tax
Post by: Tezihunt on June 06, 2010, 08:13:48 PM
coz profits will be tax free :bangin:

But for the banks and mutual funds profits will remain tax free even on the buys after 1st july then why would they panic for buying?
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 06, 2010, 09:15:26 PM
still a lot of confusion
Title: Re: CGT -- Capital Gains Tax
Post by: M&M on June 06, 2010, 09:34:48 PM
chalo sub choro .. let's discuss ..

ye batao why do ppl think volumes will shrink after CGT ?

issliye kio key daytraders, short to medium term traders will not participate ? hey ji ?

kio ?

kio key 7.5 se 10 percent ka tax jo lag jaye ga

acha jee .. agar aisa hey to .. matlab ab to volumes tabhi aayega jab CGT hate ga ? hey ji ?
per wo to hatna door .. increase hona hey - which means key volumes ko aur bhi low hona hey

to ye scenario kuch samajh nahin aata rite ?

ab aik doosra angle hey
agar aik company apni investment per 1M Rs ka average profit book kerti thi CGT se pehle to allah key bandey kia ye ziada logical nahin lagta key ab wo 1.1M Rs ka profit book karegi - 0.1M Rs wo dega govt ko .. baaki profit CGT se pehle wala ..

ab ye dekho key agar har koi aisa kerega .. just for an example jis ko 10 per sell kerna tha wo ab koshish kerega key 11 per bechey taakey pehli waali position per hi aajaye - hey ji ? issey kia hoga market ki overall P/E achi hojaye gi jo key aik ideal case hey.

to merey aziz bhaiyo aur unki behno - ye doosra angle mujhey ziada practical lagta hey.

PS:
aap ko poora haq hey key aap munderja-bala matan per apni raye dey aur jaha jaaiz ho, ussmey sudhar karey - shukriya.

Title: Re: CGT -- Capital Gains Tax
Post by: 007 on June 06, 2010, 09:48:13 PM
volmes might shrink after 1 jul
Title: Re: CGT -- Capital Gains Tax
Post by: blue chip on June 06, 2010, 09:52:14 PM
chalo sub choro .. let's discuss ..

ye batao why do ppl think volumes will shrink after CGT ?

issliye kio key daytraders, short to medium term traders will not participate ? hey ji ?

kio ?

kio key 7.5 se 10 percent ka tax jo lag jaye ga

acha jee .. agar aisa hey to .. matlab ab to volumes tabhi aayega jab CGT hate ga ? hey ji ?
per wo to hatna door .. increase hona hey - which means key volumes ko aur bhi low hona hey

to ye scenario kuch samajh nahin aata rite ?

ab aik doosra angle hey
agar aik company apni investment per 1M Rs ka average profit book kerti thi CGT se pehle to allah key bandey kia ye ziada logical nahin lagta key ab wo 1.1M Rs ka profit book karegi - 0.1M Rs wo dega govt ko .. baaki profit CGT se pehle wala ..

ab ye dekho key agar har koi aisa kerega .. just for an example jis ko 10 per sell kerna tha wo ab koshish kerega key 11 per bechey taakey pehli waali position per hi aajaye - hey ji ? issey kia hoga market ki overall P/E achi hojaye gi jo key aik ideal case hey.

to merey aziz bhaiyo aur unki behno - ye doosra angle mujhey ziada practical lagta hey.

PS:
aap ko poora haq hey key aap munderja-bala matan per apni raye dey aur jaha jaaiz ho, ussmey sudhar karey - shukriya.



nasha samjhtay ho...........cigrate wala cigrate peena nai chorata chaay tu 5 rs duty aur laga dain....sharab wala sharab nai chorata kuynke ye aik nasha hai..................stock market itself aik nahsa hai CGT 30 % b laag gaya tu loag kam kareen ga.................ye waqat bari zalim cheez hai bahi saab hazam ho jata hai dey will cry n dey will cry high but phir maan jaeen gee kuch b nai ho ga result seasin anay do bahat kuch acha he lagay ga
Title: Re: CGT -- Capital Gains Tax
Post by: mamu jee on June 06, 2010, 10:07:45 PM
chalo sub choro .. let's discuss ..

ye batao why do ppl think volumes will shrink after CGT ?

issliye kio key daytraders, short to medium term traders will not participate ? hey ji ?

kio ?

kio key 7.5 se 10 percent ka tax jo lag jaye ga

acha jee .. agar aisa hey to .. matlab ab to volumes tabhi aayega jab CGT hate ga ? hey ji ?
per wo to hatna door .. increase hona hey - which means key volumes ko aur bhi low hona hey

to ye scenario kuch samajh nahin aata rite ?

ab aik doosra angle hey
agar aik company apni investment per 1M Rs ka average profit book kerti thi CGT se pehle to allah key bandey kia ye ziada logical nahin lagta key ab wo 1.1M Rs ka profit book karegi - 0.1M Rs wo dega govt ko .. baaki profit CGT se pehle wala ..

ab ye dekho key agar har koi aisa kerega .. just for an example jis ko 10 per sell kerna tha wo ab koshish kerega key 11 per bechey taakey pehli waali position per hi aajaye - hey ji ? issey kia hoga market ki overall P/E achi hojaye gi jo key aik ideal case hey.

to merey aziz bhaiyo aur unki behno - ye doosra angle mujhey ziada practical lagta hey.

PS:
aap ko poora haq hey key aap munderja-bala matan per apni raye dey aur jaha jaaiz ho, ussmey sudhar karey - shukriya.


11 tu door ha ma kehta hoon 10 ka b wait na karo 9 Rs pr he sale kr do because usually 10 Rs k chakar ma munafa ke bejhay nuqsaan b ho sakta ha,Rahe baat Saaly CGT ke tu yah tu kuch spasific  brokers ka kaarnama ha jo chahty hain k public zeada daar tk apna paisa unky stocks ma daal kr wait kart rahy oor woh public ka paisa khud use karty rahain :smilestar:
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 06, 2010, 10:20:21 PM

masla cgt deyna ka nahi hai woh tu profit ho ga tu log dain ge hi lekin
black money tax net mey aanay ke dar se shaid aisay log apna paisa nikaal lain
Title: Re: CGT -- Capital Gains Tax
Post by: M&M on June 06, 2010, 11:04:20 PM

masla cgt deyna ka nahi hai woh tu profit ho ga tu log dain ge hi lekin
black money tax net mey aanay ke dar se shaid aisay log apna paisa nikaal lain

haan asal chakker yehi hey. to phir 1st july onwards

welcome to black money free market. [hehe]
Title: Re: CGT -- Capital Gains Tax
Post by: Big Broker on June 07, 2010, 12:09:24 AM

masla cgt deyna ka nahi hai woh tu profit ho ga tu log dain ge hi lekin
black money tax net mey aanay ke dar se shaid aisay log apna paisa nikaal lain

Every one who is invested in stock market works under a certain "UIN" which is issued against his/her CNIC. So basically you are already recorded with FBR right when you open your account.  :shoaby:
Title: Re: CGT -- Capital Gains Tax
Post by: umer on June 07, 2010, 03:17:10 AM
plz answer my question (if I bought 1500 shares of askari bank in 2008 april and I buy 6500 more shares of askari bank in 2010 june so my total is 8000 now if I want to sale 4000 shares at what shares thay will deduct tax because might be in 4000 shares which I sold I have 1500 old one which I bought in 2008) and in which way thay will deduct tax on bonus shares If we get these bonus shares on the shares which we got in 2008 or 2009
Title: Re: CGT -- Capital Gains Tax
Post by: co2 on June 07, 2010, 03:52:38 AM
bonus shares  per nhi  hai  tex
Title: Re: CGT -- Capital Gains Tax
Post by: co2 on June 07, 2010, 03:54:24 AM
jo b sahres 1 july  k bad buy  ker  k sell kero  gey us  per  tex hai  pehle   wale  per nhi :banana:
Title: Re: CGT -- Capital Gains Tax
Post by: Manzoor Khan on June 07, 2010, 08:29:31 AM
jo b sahres 1 july  k bad buy  ker  k sell kero  gey us  per  tex hai  pehle   wale  per nhi :banana:
matlab 1st july ke baad share khareedna band
Title: Re: CGT -- Capital Gains Tax
Post by: Celebrations on June 07, 2010, 08:59:43 AM
jo b sahres 1 july  k bad buy  ker  k sell kero  gey us  per  tex hai  pehle   wale  per nhi :banana:
matlab 1st july ke baad share khareedna band
khreedna tau band nahi hosakta - han yeh zaroor hai ke baichna thore lambe arse k baad hoga which automatically reduces the daily volumes aur abi foreign investors ka tax ka masla baqi hai k woh kaise tax pay karenge unke pass tau Pak. NTN hi nahi hota hai - Foreign selling ka ziada khatra hai??????? Plz coments about da same, if anybody has updates???
Title: Re: CGT -- Capital Gains Tax
Post by: M&M on June 07, 2010, 09:04:59 AM
plz answer my question (if I bought 1500 shares of askari bank in 2008 april and I buy 6500 more shares of askari bank in 2010 june so my total is 8000 now if I want to sale 4000 shares at what shares thay will deduct tax because might be in 4000 shares which I sold I have 1500 old one which I bought in 2008) and in which way thay will deduct tax on bonus shares If we get these bonus shares on the shares which we got in 2008 or 2009

6500 shares ki value per jo bhi gain hoga ussper 7.5% or 10% [depending on the time span] kateyga.
1500 shares kio key july 1 se pehle khareda hey to usski value per jo gain hoga ussper koi tax nahin kateyga.
so therefore in the end 8000 shares sell kerogey [kaisey bhi kerke] CGT 6500 shares key gain per hi katega.

bonus shares per koi tax nahin.



Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 07, 2010, 09:52:08 AM
Capital Gains Tax- widely expected but Advance tax is an irritant

The widely expected capital gains tax (CGT) has finally been announced. The
mechanism is broadly in line with the modalities agreed between the KSE and
GoP finalized in Feb 2010 and thus has already been priced in by the market.
That said, imposition of advance tax on capital gains on a quarterly basis has
been a major surprise in the budget. To ensure timely documentation and regular
collection of the capital gains tax, Sec 147 of the Income Tax Ordinance 2001 has
been amended to include capital gains in the list of income sources subject to the
advance tax regime.

Resultantly, an advance tax of 2% would be charged on realized profits of
companies/Association of Persons (AOPs) for holding periods less than 6 months,
while 1.5% advance tax would be charged for 6-12 months holding period. The
advance tax would be payable to the tax dept within seven days after the close of
each quarter. We believe, the imposition of advance tax bears slightly negative for
equity markets as a large number of institutions would now have to submit their
capital returns on a quarterly basis instead of an annual basis as anticipated
earlier.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 07, 2010, 10:24:57 AM
CGT – the cat rears its head out of the bag!

Applicable rates on CGT are 10% and 7.5% depending on holding period (details in Table 1) and
should apply to local and foreign investors alike in our view. While we await clarity on currency
losses for foreigners, if Pak follows the Indian model, foreigners will pay tax based on price
movement in Pak Rupee and follow FIFO accounting. Transaction costs are likely to be adjusted
against capital gains. In addition, earlier news flow indicates that CGT should apply post June and
prior inventory should be exempt. While seamless modalities will be important for institutional
investors, key threat to KSE emanates from individual investors’ aversion to documentation, which
could depress volumes (retail is 50% of daily trading volumes).
Title: Re: CGT -- Capital Gains Tax
Post by: Tezihunt on June 07, 2010, 11:15:40 AM
Capital Gains Tax- widely expected but Advance tax is an irritant

The widely expected capital gains tax (CGT) has finally been announced. The
mechanism is broadly in line with the modalities agreed between the KSE and
GoP finalized in Feb 2010 and thus has already been priced in by the market.
That said, imposition of advance tax on capital gains on a quarterly basis has
been a major surprise in the budget. To ensure timely documentation and regular
collection of the capital gains tax, Sec 147 of the Income Tax Ordinance 2001 has
been amended to include capital gains in the list of income sources subject to the
advance tax regime.

Resultantly, an advance tax of 2% would be charged on realized profits of
companies/Association of Persons (AOPs)
for holding periods less than 6 months,
while 1.5% advance tax would be charged for 6-12 months holding period. The
advance tax would be payable to the tax dept within seven days after the close of
each quarter. We believe, the imposition of advance tax bears slightly negative for
equity markets as a large number of institutions would now have to submit their
capital returns on a quarterly basis instead of an annual basis as anticipated
earlier.

It shows that advance tax will be imposed on companies and not on individual. If so it is good for us.Is it so Farzooq Bhai?
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 07, 2010, 11:16:52 AM
Capital Gains Tax- widely expected but Advance tax is an irritant

The widely expected capital gains tax (CGT) has finally been announced. The
mechanism is broadly in line with the modalities agreed between the KSE and
GoP finalized in Feb 2010 and thus has already been priced in by the market.
That said, imposition of advance tax on capital gains on a quarterly basis has
been a major surprise in the budget. To ensure timely documentation and regular
collection of the capital gains tax, Sec 147 of the Income Tax Ordinance 2001 has
been amended to include capital gains in the list of income sources subject to the
advance tax regime.

Resultantly, an advance tax of 2% would be charged on realized profits of
companies/Association of Persons (AOPs)
for holding periods less than 6 months,
while 1.5% advance tax would be charged for 6-12 months holding period. The
advance tax would be payable to the tax dept within seven days after the close of
each quarter. We believe, the imposition of advance tax bears slightly negative for
equity markets as a large number of institutions would now have to submit their
capital returns on a quarterly basis instead of an annual basis as anticipated
earlier.

It shows that advance tax will be imposed on companies and not on individual. If so it is good for us.Is it so Farzooq Bhai?


yes
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 07, 2010, 12:56:26 PM
CGT Exemption withdrawn for equities; minor deviations from
earlier understanding

The federal budget finally ended the Capital Gains Tax (CGT) exemption on
equity trading w.e.f July 1, 2010. The tax schedule was broadly in-line with the
one outlined earlier in February, 2010, however an official notification with
regards to exact modalities is still awaited.

It should be noted that any purchase of shares done prior to July 1, 2010 will
remain exempt from CGT, irrespective of the date of disposal of these shares.
Moreover, as per our understanding, trading activity for mutual funds should
remain tax-exempt. However any gains made by investors of (both open-end
and closed-end) equity funds on buy-sell of units will be charged with CGT as
per the standard slabs. On the positive side, CGT will be adjustable for any
losses for a period of five years.

Against earlier expectations however, capital gains made by foreign investors
may not be adjusted for potential Pak Rupee devaluation. Moreover, the
‘Advanced Tax’ clause also eliminated the exemption on CGT for equity trading.
It was thus announced that entities filing advanced tax on quarterly basis will be
liable to pay 2% advanced CGT on security holding period of less than 6
months while holding period of 6-12 months will be applied with advanced CGT
of 1.5%. We understand that while such advanced tax will be adjusted against
potential future capital losses, treatment of CGT under a separate block may
not allow such adjustment against income earned under other revenue heads.
Currently, equity transactions in Pakistan are levied with 16% FED on
brokerage commission for sale of securities. 0.01% Withholding Tax (WHT) is
applied for purchase of securities, however it is considered as minimum tax
liable for aforesaid transactions. Under the CGT regime, we understand that
WHT will also be adjustable against CGT filed annually.

As mentioned earlier, we await official FBR notification on the modalities of CGT
implementation and will update our investors as soon as the same is finalized.
Title: Re: CGT -- Capital Gains Tax
Post by: invincible on June 07, 2010, 01:20:48 PM
http://www.jang.com.pk/jang/jun2010-daily/07-06-2010/u33858.htm   

 :fingerscrossed1:  :fingerscrossed1:
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 07, 2010, 01:39:14 PM
http://www.jang.com.pk/jang/jun2010-daily/07-06-2010/u33858.htm   

 :fingerscrossed1:  :fingerscrossed1:

right click image click properties copy url link and click insert image paste link

(http://www.jang.com.pk/jang/jun2010-daily/07-06-2010/updates/6-7-2010_33858_1.gif)

Title: Re: CGT -- Capital Gains Tax
Post by: invincible on June 07, 2010, 01:47:45 PM
 :thanks:
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 07, 2010, 04:59:14 PM
ADVANCE TAX
[Section 147(4B)]
The basis for payment of quarterly advance tax is being modified as under:

(i) An individual would pay advance tax where his latest assessed income is
Rs 500,000 or more (presently the threshold is Rs 200,000 or more);

(ii) An Association of Persons will henceforth pay advance tax as per the principles
and procedures applicable to companies; and

(iii) The dates for payments of advance tax by Association of Persons and Companies
are proposed as follows:

Payment date
September September 25
December December 25
March March 25
June June 15
Title: Re: CGT -- Capital Gains Tax
Post by: 007 on June 08, 2010, 01:59:29 AM
oopeer keh rahay ho tax nahin hai individual per

neechay kuch aur copy paste kiya hai  :arrowhead:
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 08, 2010, 09:21:42 AM
KSE members discuss CGT, other issues
RECORDER REPORT
KARACHI (June 08 2010): An informal meeting of Karachi Stock Exchange (KSE) members was held here on Monday to discuss various issues related to FY11 budget announcements. The members discussed the imposition of newly introduced capital gains tax (CGT) from July 1, 2010. However, majority of the members sought clarifications over the modalities of imposition of CGT.

The meeting was informed that a senior official of Federal Bureau of Revenue (FBR) has been invited to visit KSE during this week to clear all confusions regarding the imposition of CGT. The issue of advanced tax on CGT to be filed individually on quarterly basis was also discussed. It was observed that initially it may create some additional hassle especially for individual investors to file returns on their own.

It was decided that a proposal would be sent to the concern authorities requesting them to allow filing of return on six month basis instead of quarterly basis. The imposition of 0.3 percent tax on bank transactions was also discussed and it was decided that a clarification would be sought from the FBR on this issue.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 08, 2010, 09:24:30 AM
Finance Bill proposes 17.5pc CGT on shares trading by 2014
 
 
Tuesday, June 08, 2010
By Shahnawaz Akhter & Javed Mirza

KARACHI: The capital gains tax (CGT) would gradually be raised to 17.5 per cent over the next five years on the sale of securities held for less than six months, according to Finance Bill 2010.

For financial years 2010/11 and 2011/12 (July-June), the Bill proposes 10 per cent CGT on short-term holding, which would be increased to 12.5 per cent in fiscal 2012/13, then to 15 per cent in 2013/14 and to 17.5 per cent in 2014/15.

In the other category, where holding period of a security remains more than six months, but less than 12 months, the CGT rate would reach up to 10 per cent in the next six years.

According to the Finance Bill, the sale of securities on holding period less than 12 months, but more than six months, the rate of CGT is proposed at 7.5 per cent for the tax year 2010. A 0.5 per cent yearly rise has been proposed over the next five years that would take CGT rate to 10 per cent in 2015.

“The stock market was exempted from the capital gains tax for the last three decades,” said Haider Patel, FCA Earnst & Youngs. The government now enforced this tax after consulting all the stake holders. Ahsan Mehanti, CEO of Shahzad Chamdia Securities, said that

CGT did not come as a surprise. “The market was expecting it. But the advance tax is a surprise for the market. Its impact would be slightly negative.” The Finance Bill laid down the criteria for CGT payment, which says that the taxpayer would pay advance tax on a quarterly-basis, while the rate of advance tax liability would be two per cent, where holding period of a security remains less than six months.

Where holding period of a security remains more than six months, but less than 12 months, the advance tax liability would be imposed at the rate of 1.5 per cent.Farhan Mehmood, an analyst at the Topline Securities, said that though the market expected CGT, it would hit trading volumes. “A large portion of around 55 to 60 per cent individual trading is not being declared to the tax authorities.”
 
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 08, 2010, 10:18:14 AM

Responding to a question, sources said that the FBR has no intention to withdraw payment of advance tax on capital gains on sale of securities. This proposal has been fully incorporated in the Finance Bill after consultation with all stakeholders. Therefore, there is no reason for the FBR to withdraw this provision. The mechanism of advance tax would facilitate the investor to make payment keeping in view his gains or losses.

Sources said that the FBR will issue a detailed procedure to clarify all aspects of the capital gains tax (CGT) on stock exchanges. The short-term capital gains mechanism will be introduced after July 1, 2010.

Sources said that the rules would be issued after approval of the Finance Bill 2010 by the Parliament. The rules would explain the procedure for determination of capital gains. The FBR is in the process of framing such rules and procedures to be issued after passage of the Finance Bill.

To another question, they said that the CGT would be applicable on the purchases made after July 1, 2010. The purchases made before June 30, 2010 would be exempted from CGT.

The exemption from tax on capital gains on sales of shares/stock/securities, allowed for the purposes of capital formation, is due to expire on June 30, 2010. The capital gains of sale of these stocks/shares/securities are proposed to be taxed from July 1, 2010. This tax is to be charged as under: Where holding period of a stocks/shares/security is less than six months tax is to be charged 10 percent. Where withholding period of the stocks/shares/security exceeds six months but it is not more than a period of twelve months, tax is to be charged @ 7.5 percent. In order to cater for the capital formation needs, no tax is chargeable on capital gains arising from securities held for a period of over 12 months.

Title: Re: CGT -- Capital Gains Tax
Post by: makenamjad on June 08, 2010, 10:29:19 AM
yaar koi banda mujhay simple form mein bta sakta hai k CGT kia hai,,,,,,,,
for example:

a- if i buy share of price 100,000  and sell them within 6 months(lets suppose after 2 months) amount to 110,000.  then how much tax should i pay...
b- if i buy share of price 100,000  and sell them within 6 months(lets suppose after 2 months) amount to 90,000.  then how much tax should i pay...

plz can someone explain?
Title: Re: CGT -- Capital Gains Tax
Post by: makenamjad on June 08, 2010, 10:39:40 AM
stock market ko unhi logon ne barbaad kernay ka bera uthaya jo khud KSE kay big heads rahay hain i.e., shoukat tareen and Hafeez shaikh....laanat hai in per. In ko pata hona chahye tha ke there r very few  how have net and continuous earnings from this business. Actually this is not business, b/c a business has some strong footing but stock market has none. this is something like luck test that every one wanting money likes to play.........and evenually fails.  Now if u succeed in making 10 profitable trades and pay tax for them, and for 90 trades u gain loss. so there shuold be a capital loss refund system too....or the CGT should be on over-all calculation of whole year trades. I mean if a person has a net income from overall trading, then he should be taxed, just like income tax.
Secondly, if the collection mechanism is like income tax returns, it will badly affect the common man involved in stocks, as he will have to maintain his full record keeping all legal aspects. As a result, turn over will reduce to the extreme. But if it is cut in the same way as brokerage+CVT+FED, then nope as every one pays these expenses for every trade, so he will feel easy.....just a simple calculation if there is 12 paisa per share expense, then we shall adjust is as 13-14-15 or 20 paisa per share expense......it will be easy to digest.
Lets see the mechanism of implementation............in kan_aron ko lootna aata hai......maan gai..........agriculture ko nahi tax kia.....
Mr Research Doctor i agree with you
 :lazy2:

I agree with u it should be on net income,,,not a single transaction,,,its totaly unfair
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 08, 2010, 10:40:35 AM
yaar koi banda mujhay simple form mein bta sakta hai k CGT kia hai,,,,,,,,
for example:

a- if i buy share of price 100,000  and sell them within 6 months(lets suppose after 2 months) amount to 110,000.  then how much tax should i pay...
b- if i buy share of price 100,000  and sell them within 6 months(lets suppose after 2 months) amount to 90,000.  then how much tax should i pay...

plz can someone explain?

case a tax 1000
case b no tax

Title: Re: CGT -- Capital Gains Tax
Post by: makenamjad on June 08, 2010, 11:20:52 AM
yaar koi banda mujhay simple form mein bta sakta hai k CGT kia hai,,,,,,,,
for example:

a- if i buy share of price 100,000  and sell them within 6 months(lets suppose after 2 months) amount to 110,000.  then how much tax should i pay...
b- if i buy share of price 100,000  and sell them within 6 months(lets suppose after 2 months) amount to 90,000.  then how much tax should i pay...

plz can someone explain?
case a tax 1000
case b no tax


thanks .
but if i do both transaction in one day?
and if i have some share which i bought before 1st july will they b taxed if i sell them after 1st july...?
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 08, 2010, 11:26:17 AM
yaar koi banda mujhay simple form mein bta sakta hai k CGT kia hai,,,,,,,,
for example:

a- if i buy share of price 100,000  and sell them within 6 months(lets suppose after 2 months) amount to 110,000.  then how much tax should i pay...
b- if i buy share of price 100,000  and sell them within 6 months(lets suppose after 2 months) amount to 90,000.  then how much tax should i pay...

plz can someone explain?
case a tax 1000
case b no tax


thanks .
but if i do both transaction in one day?
and if i have some share which i bought before 1st july will they b taxed if i sell them after 1st july...?


both transactions in one day means u will end up with no profit no loss so no tax
no tax on buyings before 1st july
Title: Re: CGT -- Capital Gains Tax
Post by: makenamjad on June 08, 2010, 11:38:05 AM
yaar koi banda mujhay simple form mein bta sakta hai k CGT kia hai,,,,,,,,
for example:

a- if i buy share of price 100,000  and sell them within 6 months(lets suppose after 2 months) amount to 110,000.  then how much tax should i pay...
b- if i buy share of price 100,000  and sell them within 6 months(lets suppose after 2 months) amount to 90,000.  then how much tax should i pay...

plz can someone explain?
case a tax 1000
case b no tax


thanks .
but if i do both transaction in one day?
and if i have some share which i bought before 1st july will they b taxed if i sell them after 1st july...?

both transactions in one day means u will end up with no profit no loss so no tax
no tax on buyings before 1st july
thanks a lot,,,,u made me so clear,,,
just 1 more query....
if i buy share of 10000 on 15th july and sell them on 15 december with profit of 1000,,,and then buy shares on 16 december and sell them on 15 march with a loss of 1000 ,,,,,as the first transaion is within 6 months and second within 3 months of first will they both be join togather,,,,,,?

 :dunno:
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 08, 2010, 12:08:52 PM

returns will be submitted for all yearly transactions
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 08, 2010, 12:46:53 PM
ADVANCE TAX
[Section 147(4B)]
The basis for payment of quarterly advance tax is being modified as under:

(i) An individual would pay advance tax where his latest assessed income is
Rs 500,000 or more (presently the threshold is Rs 200,000 or more);

(ii) An Association of Persons will henceforth pay advance tax as per the principles
and procedures applicable to companies; and

(iii) The dates for payments of advance tax by Association of Persons and Companies
are proposed as follows:

Payment date
September September 25
December December 25
March March 25
June June 15

individuals making gains more than 500k will have to submit advance tax
Title: Re: CGT -- Capital Gains Tax
Post by: makenamjad on June 08, 2010, 01:14:59 PM

returns will be submitted for all yearly transactions

thanks...... :thanks:
from july 1st to july 1st....
Title: Re: CGT -- Capital Gains Tax
Post by: axl_rose on June 08, 2010, 01:31:22 PM
Capital gains tax Investor concerns & our take

Ever since the KSE announced its has broadly agreed to a capital gains tax (CGT) framework with the Government, there has been a barrage of questions coming in from investors who seem confused on how the process would be implemented. We have therefore carried out a detailed study on the key questions brought forth, and following discussions with KSE officials and tax experts, have
tried to come up with the required answers. Some of the questions include:

???? How will the capital gain tax be implemented in Pakistan?
???? Is the tax going to be deducted at source or charged on an annualized return basis?
???? What will be the treatment for capital losses?
???? What will be the treatment of the current holdings under this CGT structure?
???? Will there be any change in the tax structure for banks?
???? What will be the implementation deadline for Insurance companies (June orDec)?
???? Would mutual funds be liable to pay CGT?
???? How will the bonus and right shares be treated under CGT?
???? How has the CGT been implemented worldwide?
???? What will be the tax policy for foreigners?
???? What will be the impact of CGT’s imposition on the government’s tax base?
???? What will be the effective purchase cost for determination of capital gains/losses?


JS Research’s answers to investor queries:

???? How will the capital gain tax be implemented in Pakistan?

Capital gain tax would be charged on all purchases made after July 1, 2010 under different slabs (see table). The tax rates will remain unchanged for 2 years i.e. until FY12. Effective FY13, there will be an annual rate increase of 2.5% for the less than 6 months category capped at 17.5%, while an annual increment of 0.5% for 6-12 months, capped at 10%.

???? Is the tax going to be deducted at source or charged on an annualized return basis?
Investors would need to file an annual return for capital gains/losses as the tax will not be deducted at source.

???? What will be the treatment for capital losses?
In accordance with the current tax laws, capital losses can be adjusted against capital gains, while unabsorbed losses can be carried forward for a maximum period of 6 years.

Illustration: An investor earns capital gains of Rs2mn in FY11, while he incurs a capital loss of Rs3mn. As a result, the net loss for the year arrives at Rs1mn, which would be allowed to be carried forward, for offsetting against future capital gains for a maximum period of 6 years i.e. until FY17.

???? What will be the treatment of the current holdings under this CGT structure?

Profit from disposal of holdings prior to July 1, 2010, would be exempt from tax, however, investors would need to clearly indicate such details in their tax returns.

???? Will there be any change in the tax structure for banks?
There will be no change in the capital gains tax structure for banks.

???? What will be the implementation deadline for Insurance companies (June or Dec)?
Though insurance companies have their financial year end in December, we understand that implementation of the CGT would be uniformly carried out, and hence be effective from July 1, 2010 for these institutions as well.

???? Would mutual funds be liable to pay CGT?
Though details regarding the applicability for Mutual funds are still being processed, we understand that mutual funds would not be liable to pay CGT, and it would be charged only on the realized returns of unit holders.

???? How will the bonus and right shares be treated under CGT?
Bonus shares do not form part of purchases; hence, they will be exempt from the calculation of CGT. Right shares though, are fresh purchases and thus gains on those would indeed be subjected to CGT.

???? How has the CGT been implemented worldwide?
We have carried out a study on countries from three different continents to obtain an understanding of the CGT regulations enforced else where. The following table illustrates the CGT mechanism in India, UK and Nigeria.
Title: Re: CGT -- Capital Gains Tax
Post by: makenamjad on June 08, 2010, 01:45:34 PM
where is table????
Title: Re: CGT -- Capital Gains Tax
Post by: axl_rose on June 08, 2010, 01:54:23 PM
where is table????
:shoaby:
Title: Re: CGT -- Capital Gains Tax
Post by: makenamjad on June 08, 2010, 02:20:11 PM
where is table????
:shoaby:
plz give us link so that we can download the table.
 :biggrin:
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 08, 2010, 10:36:42 PM
CAPITALS GAINS TAX: IMPACT ON MUTUAL FUNDS
   
 
  The Finance Bill 2010 ended the Capital Gains Tax (CGT) exemption on investment in Securities. Subject to this Ordinance, a “gain arising on the sale of securities” will be liable to a tax in accordance with a predefined tax schedule.
 The effect of the CGT on investors of mutual funds is still uncertain. According to the Finance Bill 2010, securities means “shares of a public company, vouchers of Pakistan Telecommunication Corporation, Modaraba Certificates or instrument of redeemable capital”. This definition is open to debate and various fund managers are still uncertain as to whether mutual funds fall subject to the CGT. 
 FBR is expected to issue a detailed paper on the modalities, procedure and incidence of CGT after the Finance Bill 2010 is approved by the parliament. In the meanwhile, we present our understanding of the related issues for mutual funds. 
 
Title: Re: CGT -- Capital Gains Tax
Post by: momo on June 09, 2010, 08:12:53 AM
Hey guys, I understand the basic details of the CGT, but what is this quarterly thing?
Meaning you have to pay tax on your unrealized gains every quarter? What kind of a tax system is this? Shouldn't it be yearly? As in when you sell it, that's when you know whether you have a realized gain/loss and how much of it you have to recognize? Shouldn't you be taxed then, instead of being taxed every quarter, when you don't have the money to pay taxes on the gain you haven't yet received?

Thanks.
Title: Re: CGT -- Capital Gains Tax
Post by: M&M on June 09, 2010, 12:30:45 PM
Hey guys, I understand the basic details of the CGT, but what is this quarterly thing?
Meaning you have to pay tax on your unrealized gains every quarter? What kind of a tax system is this? Shouldn't it be yearly? As in when you sell it, that's when you know whether you have a realized gain/loss and how much of it you have to recognize? Shouldn't you be taxed then, instead of being taxed every quarter, when you don't have the money to pay taxes on the gain you haven't yet received?

Thanks.

patani kia chirand hey yeh .. mujhey laga broker hi kaatey ga CGT other taxes ki tarha per yeh to khud jaaker khuwari kerney ka keh rahey hey .. 2% kato chahye 5% .. broker key through hi kero yar jo kerna hey ..
saarey individuals ka dimag shaat hua hua hey tabhi apparently 1st july se pehle buy kerney ki ker rahey hey.
Title: Re: CGT -- Capital Gains Tax
Post by: M&M on June 09, 2010, 12:35:19 PM
Hey guys, I understand the basic details of the CGT, but what is this quarterly thing?
Meaning you have to pay tax on your unrealized gains every quarter? What kind of a tax system is this? Shouldn't it be yearly? As in when you sell it, that's when you know whether you have a realized gain/loss and how much of it you have to recognize? Shouldn't you be taxed then, instead of being taxed every quarter, when you don't have the money to pay taxes on the gain you haven't yet received?

Thanks.

When will advance tax be paid and at what rate?

The advance tax will be paid by the taxpayer within seven days after the close of each quarter. The rate is 2 per cent for gains realised within 6 months & 1.5 per cent for gains made between 6 and 12 months. Which means, if an investor has made Rs100k through short term trading then he will have to pay Rs2k to tax authority at the end of quarter.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 11, 2010, 04:36:47 PM
Budgetary Concerns for Capital Markets: Issues to be Addressed in Tomorrow’s Meeting   
   
  The end of Capital Gain Tax (CGT) exemption on securities wef July 1, 2010 has led to confusion amongst the market players on exact implementation and modalities of the tax regime. 
 Responding to these concerns, Mr. Israr Rauf, Member, Direct Tax of Federal Board of Revenue (FBR) is scheduled to visit KSE tomorrow. 
 We thus highlight, in this note, the issues that need to be clarified i.e. 1) quarterly filing, 2) instruments included in the CGT ambit, 3) modalities for mutual funds, insurance companies and pension funds, 4) carry forwarding of losses and 5) final tax liability on profit on debt instruments. 
 
 
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 11, 2010, 04:40:36 PM

Capital gains tax Our discussion with tax officials

After Capital gains tax (CGT) implementation was made official in last week’s
budget announcement, certain areas still remain grey. Hence, in order to seek
further clarity over the issues, we met with tax officials and presented our
concerns regarding this new tax. Below are key takeaways from our meeting with
them.

Q1. Will the CGT be applicable on cash settled futures and deliverable
futures?
Ans. CGT will be applicable on both cash settled futures and deliverable futures,
as these terms are covered in the definition of Redeemable capital.

Q2. Will CGT be applicable for unit holders on redemption of Income &
Balanced funds?
Ans. Yes, it will be applicable to unit holders on redemption of both of Income &
Balanced funds.

Q3. Will borrowed cost & incidental expenses be adjustable when
computing CGT?
Ans. For securities purchased through borrowed capital or by way of pledged
borrowing. Taxpayers may adjust the borrowing cost from the capital gains.
Further, other verifiable expenses such as interest cost, salaries, telephone
expenses, et al incurred exclusively in the process of earning capital gains will
also be allowed.

Q4. Will Advance tax be applicable on Individuals? (Under Section 147)
Ans. Advance tax will be applicable on Individuals whose income exceeds
Rs500,000 per annum.

Q5. What will be the method of valuation under CGT regime; FIFO or LIFO?
Ans. The matter is still under discussion and a final is decision yet to be reached.
One of the methods in consideration for implementation from July 1, 2010 is FIFO.
For example assuming we had 20,000 shares of OGDC on Jun 30, and we
bought 10,000 shares each on July 1, July 2 and July 3 – with total inventory
building up to 50,000 shares. Now if we go on to sell 32,000 shares of OGDC on
July 5, inventory for selling purposes will be first taken from the stock of July 1,
followed by July 2 and then July 3. As this totals 30,000 shares, the additional
2,000 shares will be taken from the stocks before 30 Jun. CGT will now be
charged on gains made on shares bought after July 1, i.e. 30,000 shares, while no
tax will be charged on gains made on the 2,000 shares, which were purchased
before July 1. This is illustrated via the table on the following page.
Taking this example further, if we had bought an additional 10,000 shares on July
4, the remaining stock of 2,000 shares would be taken up from this purchase and
not the position held at Jun 30, and therefore be liable to CGT.
However, a final decision regarding the exact method is yet to be made.

Q6. What will be the treatment of Bonus/Right shares?
Ans. As there is no cost of Bonus shares, issuance of such shares (Bonus,
Rights) reduces the cost of shares held. Implementation of FIFO method will aim
to neutralize the benefit, as partial selling of original expensive shares at a loss
will be offset with the eventual sale of shares acquired at zero (Bonus) or low cost
(Rights).
Title: Re: CGT -- Capital Gains Tax
Post by: Tezihunt on June 12, 2010, 09:31:35 AM
(http://www.express.com.pk/images/NP_LHE/20100612/Sub_Images/1100967102-1.jpg)
(http://www.express.com.pk/images/NP_LHE/20100612/Sub_Images/1100967102-2.gif)
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 12, 2010, 09:45:31 AM
Collection of CGT: Senate body terms existing arrangement 'total fraud'
 
SOHAIL SARFRAZ
ISLAMABAD (June 12 2010): The Federal Board of Revenue (FBR) has assured the Senate standing committee on finance that tax authorities would convey the recommendations of the committee to the Karachi Stock Exchange (KSE) on Saturday to impose capital gains tax (CGT) on stocks/shares purchased before the June 30, 2010.

Terming the existing arrangement of collecting capital gains tax (CGT) on stock exchange as 'total fraud' in the Finance Bill 2010, the Senate standing committee on finance has directed the FBR to impose CGT on securities purchased before June 30, 2010. FBR Member Direct Taxes Israr Rauf also assured the committee that FBR would incorporate the recommendation of the committee in its rules on the CGT on stock markets, to be issued after approval from the Parliament.

Israr Rauf would rush to Karachi on Saturday to convey the committee's recommendation of imposing the CGT on securities purchased before June 30, 2010 to the Karachi Stock Exchange (KSE). The FBR officials gave this assurance to the committee taking into account unanimous recommendations of the Senate standing committee on finance to make the sale point basis of CGT applicability on stock markets from July 1, 2010. During the proceedings, Israr fully agreed with the viewpoint of the committee with the comments, and said, "I am going to Karachi to have meeting with the KSE and will convey the recommendations of the committee to the KSE board".

The issue came to light during committee on meeting on Friday when Senators Ishaq Dar and Talha Mahmood inquired about the status of securities purchased before June 30, 2010 regarding imposition of the CGT on stock exchanges. FBR Member Direct Taxes Policy responded that the CGT on securities would be applicable on purchases made from July 1, 2010. The exemption to the capital gains tax on stock exchanges would be available to securities purchased before June 30, 2010.

Israr said that the arrangement of imposing the CGT on stock exchanges has been introduced in the Finance Bill 2010 as per Memorandum of Understanding (MoU) signed between the Karachi Stock Exchange and the FBR during the tenure of former Finance Minister. Under the said agreement, the government had committed with the stock exchanges that the CGT would be introduced from July 1, 2010 and exemption would be available to the securities purchased up to June 30, 2010. The CGT would be applicable on shares purchase on or after July 1, 2010 in case these were sold within holding period of 6 months or before 12 months respectively.

This understanding was given by the former Finance Minister to the KSE in the past. Even the stock exchanges are resisting the existing arrangement of imposing CGT on securities and payment of advance tax on quarterly basis. The committee was surprised to know from Member Direct Taxes that former Federal Minister had signed a MoU with the KSE that the stocks purchased on or before June 30, 2010 would remain exempt from CGT in case these were sold on or after July 1, 2010.

Strongly reacting to the said arrangement of levying CGT on stock exchanges, Ishaq observed, "The reference point for imposition of CGT should be on the basis of sale of shares rather than allowing exemption on purchased share till June 30, 2010. If they don't want to pay CGT then they should come out of the market by selling their shares before July 1, 2010".

He further contested that the MoU signed between the government and the KSE was not above the Parliament. This so-called agreement is not binding on the Parliament and the government has to amend the Finance Bill as per recommendations of the Parliament. "This agreement of exempting the CGT on securities purchased before June 30, 2010 is totally fraud. It is a fraud with the nation to give blanket exemption to all kinds of securities purchased before June 30, 2010.

These stock brokers have earned profits of billions of rupees for the last many years without payment of any CGT and now stock market players should come forward and contribute their due share to the national exchequer. "When the time came to impose CGT on capital gains, a total fraud has been committed by exempting the CGT on purchases made before June 30, 2010.

Why you have given so-called exemption to the CGT in budget when the securities purchased before June 30, 2010 have been exempted. This clearly shows that all kinds of securities have been exempted from the CGT. The FBR should have continued CGT exemption to the stock exchanges instead of introducing such arrangement.

All over the world, the capital gains have been collected on the 'sale point'. When the sale of securities is made at any time, the withholding period is calculated from this period", Ishaq Dar said. He said that this kind of luxury is not available to any one in any part of the world; why the country facing multiple economic challenges should not tax such huge gains made by local and foreign investors, he added.

Dar categorically declared that, "I will resign from the committee and wage war against the FBR in case such fraudulent arrangement continued in future". He said that if the FBR would follow the MoU signed with KSE, which would reflect symbolic capital gains tax on stock market it would fetch a meagre amount of tax in the next fiscal year 2010-11.

He said that the point of purchase cannot be made basis for the applicability of CGT on stock market and only point of sale of stock must be made basis of CGT on stock market so that a handsome amount of revenue is generated from this source of income which is enjoying complete tax holiday from last many decades.

He said that all purchases of stocks are now documented with Central Depository Company (CDC) and no one would be able to tamper the data pertaining to the holding period from the tax authorities.Israr Rauf endorsed the viewpoint of the committee members that "you are absolutely right and our revenue collection would jump in case the CGT is imposed on the securities purchased before June 30, 2010."

However, the CGT exemption has been granted to securities purchased before June 30, 2010 in the light of the agreement signed between the government and the KSE. "We accept the recommendations of the committee and the recommendations would be incorporated in the CGT rules to be issued after approval of the Finance Bill, he added.

Senator Talha Mahmood objected that the Finance Bill 2010 is unclear about the imposition of the CGT imposed on the stock exchanges. On the conclusion of the meeting, Chairman Ahmed Ali confirmed to media that it was the unanimous decision of the committee to impose CGT on securities purchased before June 30, 2010.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 12, 2010, 09:46:15 AM
FBR, KSE meeting today
 
RECORDER REPORT
KARACHI (June 12 2010): The budgetary concerns for capital market and major issues would be discussed during the meeting between Member Direct Tax, Federal Bureau of Revenue (FBR), Israr Rauf, and the management of Karachi Stock Exchange here on Saturday. "The end of capital gain tax (CGT) exemption on securities from July 1, 2010 has led to confusion among the market players on exact implementation and modalities of the tax regime", analysts said.

"The issues that need to be clarified are quarterly filing, instruments included in the CGT ambit, modalities for mutual funds, insurance companies and pension funds, carrying forward of losses and final tax liability on profit on debt instruments", Hamad Aslam, Head of Research at BMA Capital, said.

Muhammad Sohail, a leading analyst and CEO of Topline Securities, said that most of individual investors are not aware of how to file a tax return. Many small investors, including housewives, are totally unaware of this process. They also believe that paying advance return creates a lot of paper work. He suggested that the FBR should allow the investors to make filing return an annual exercise rather than every three months. "Investors are not in favour of exemption but they don't want lot of calculation every quarter due to lack of awareness", he observed.

He said that instead of manual filing, the investors should be provided internet-based user-friendly filing system along with timely refund. He also suggested creating awareness regarding the calculation of gain/loss, filing of return and refund. He said that the investors whose investment is less than Rs 7.5 million should be exempted from filing return just like what FBR was planning in case of VAT from retailers.

He was of the view that the FBR should clarify that no question will be asked on June 30, 2010 cash and shares position of investors. "Because this exemption was there since more than three decades, it is impossible for an investor to justify how he/she had earned this money", he said.

The BMA Capital's report on key budgetary measures impacting capital market and investment said that the market perception over quarterly filing of CGT is that the Finance Bill 2010 requires payment of advance CGT on quarterly basis, while it will be adjusted against prospective losses, the said adjustment will result in cumbersome documents. The report said that the companies are normally required to file quarterly returns; thus there need not be an exception for CGT. However, requirements for individual investors need to be clarified as they are normally required to submit annual returns.

Regarding the impact of quarterly filing of CGT, the report said that with individuals contributing to 50 percent of trading volumes, lack of clarity will result in severe shrinkage in trading activity; which bodes negative for market price discovery and FBR's revenue generation capability from capital markets.

The report said that the CGT exemption has been withdrawn on securities; however, given latter's definition in the Finance Bill 2010 there still remains confusion with regard to application on mutual funds and TFCs.

In an effort to promote savings in the economy, mutual funds have been exempt from most taxes as long as they paid out 90 percent of their earnings in the form of dividends. Given that these dividends are already subject to 10 percent WHT, the exact ramifications for mutual funds need to be clarified.

Moreover, apart from TFCs, underlying assets for fixed income mutual funds are not subject to CGT and at least this category should remain exempt. Pakistan's saving to GDP ratio is currently one of the lowest in the region, thus creating significant impediments to investment and growth in the country.

The mutual funds currently account for assets of over Rs 220 billion and act as a key instrument in promoting government's goal of increasing savings in the country. The removal of tax exemptions will severely hurt the industry, it added.

About tax incidence for mutual funds, the report said that AMCs and brokerage houses are not to act as collecting agents. It needs to be clarified whether CGT will be applicable at source (ie mutual funds will directly pay on its trading/investment activities) or unit holders will pay on their gains made on unit sell/purchase. While it is apparent that there should be no double taxation, clarification on exact modalities should reduce uncertainties for the investors and industry.

The report said that regarding carry forward of CGT losses the market perception is that capital losses will be adjustable against any gains up to a period of five years. However, clarification is required as most losses are adjusted against taxes for a period of five years but no specific details have been announced regarding CGT. The five-year umbrella will encourage long-term and continued investment in capital markets, it added.

Regarding CGT for foreign investors, the market perception is that CGT should be calculated on $/respective investor's currency based gains. The consensus arrived at on February 10 said that CGT will be adjusted for Pak rupee devaluation during the period.

However, no details have been announced in writing. Allowing Pak rupee devaluation adjustment against CGT for foreign investors will promote foreign investment in the country, which in turn bodes well for capital markets, foreign reserves and Pak rupee stability.

The report said that announced tax brackets for CGT will not be applicable for commercial banks but nothing has been announced for insurance companies. The capital gains form a major chunk of earnings from insurance companies and therefore clarity of CGT for them is crucial in determining future economic viability and performance of the sector, it added.

The report said that tax exemption for pension funds should include CGT as continued exemption will promote saving habits in the society. Regarding tax liability on profit on TDRs, T-bills and PIBs, the market perception is that according to Finance Bill 2010, 10 percent WHT on profit on T-bills and PIBs is to be considered as final tax.

The Income Tax Ordinance already entails this relaxation on TDRs and other federal and provincial government securities; however, corporates are still required to pay corporate tax on these instruments. Thus, clarity is required with regards to exact modalities on these instruments. The report said that clarity on these issues will allow corporates to commit to government securities, essential for the government if it needs to achieve its overall borrowing target.
Title: Re: CGT -- Capital Gains Tax
Post by: Tezihunt on June 12, 2010, 09:51:02 AM
It means MLN wants to tax CGT on shares purchased before 1st JULY........???????????
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 12, 2010, 09:55:51 AM
It means MLN wants to tax CGT on shares purchased before 1st JULY........???????????

yes
Title: Re: CGT -- Capital Gains Tax
Post by: mamu jee on June 12, 2010, 11:16:51 AM
(http://www.express.com.pk/images/NP_LHE/20100612/Sub_Images/1100967102-1.jpg)
(http://www.express.com.pk/images/NP_LHE/20100612/Sub_Images/1100967102-2.gif)
Lgdhaa ha k SAAQEE nu Lamyaa Paa k Chhetar phaarny paan gy,Aadhee COAT PENT ta we CGT laoo,Aadhe nahaan ta we CGT Laoo.Aadhe Burger khaan tae we CGT laoo,Aadhae Ghusal Khany wich jaan ta we CGT Laoo,Aadhy Soon tae we CGT Laoo,Fher aanhoo samajh aaye ge CGT dhee,Kury Yawe dhaa putar,SAALAA Saneter bnya pher da hae,Aanhoo Gujhraa dhee hawaely wich Majhaaa choon ta hoona chhaedaa wae.  :bangin:
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 12, 2010, 11:44:29 AM
Senate standing committee tu bolti rehti hai
in ki sunta kon hai
Title: Re: CGT -- Capital Gains Tax
Post by: Heart Breaker on June 12, 2010, 11:47:29 AM
Aghar yeah ho gaya to mkt 30 june tak 7000 par ho gai  :bangin: :mad: :bangin:
Title: Re: CGT -- Capital Gains Tax
Post by: Papa Jee on June 12, 2010, 11:48:02 AM
It means MLN wants to tax CGT on shares purchased before 1st JULY........???????????


 :goodc:
Title: Re: CGT -- Capital Gains Tax
Post by: M&M on June 12, 2010, 12:36:30 PM
(http://pakinvestorsguide.com/Emoticons_files/lol4.gif) 8800 - here I come.
Title: Re: CGT -- Capital Gains Tax
Post by: M&M on June 12, 2010, 12:50:45 PM
It means MLN wants to tax CGT on shares purchased before 1st JULY........???????????

actually it's a unanimous decision of 'Standing Committee on Finance, Revenue, Economic Affairs, Statistics and Planning and Development'

for timepass: http://www.senate.gov.pk/ShowCommitteeDetail.asp?CommitteeCode=8
Title: Re: CGT -- Capital Gains Tax
Post by: mamu jee on June 12, 2010, 12:52:18 PM
(http://pakinvestorsguide.com/Emoticons_files/lol4.gif) 8800 - here I come.
:shoaby: :banana: :shoaby:
Title: Re: CGT -- Capital Gains Tax
Post by: jaz on June 12, 2010, 03:26:56 PM
(http://pakinvestorsguide.com/Emoticons_files/lol4.gif) 8800 - here I come.
8800 ? if that happens 6800 comes  :laugh:
Title: Re: CGT -- Capital Gains Tax
Post by: invincible on June 12, 2010, 04:22:00 PM
What will happen after 1st july? Who will be buying post june?  :skeptic: This question always make me worried. 

I need experts output in this regard
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 12, 2010, 04:28:29 PM
What will happen after 1st july? Who will be buying post june?  :skeptic: This question always make me worried. 

I need experts output in this regard


volumes would decline but surely there will be buyers and sellers
Title: Re: CGT -- Capital Gains Tax
Post by: Heart Breaker on June 12, 2010, 05:05:20 PM
Any news regarding CGT issue meeting b/w FBR and KSE?
Title: Re: CGT -- Capital Gains Tax
Post by: M&M on June 12, 2010, 05:50:06 PM
What will happen after 1st july? Who will be buying post june?  :skeptic: This question always make me worried. 

I need experts output in this regard


volumes would decline but surely there will be buyers and sellers

"This too shall pass"
Title: Re: CGT -- Capital Gains Tax
Post by: Research Doctor on June 12, 2010, 05:56:03 PM
ishaq daar laanat hai tum per. PML-N apnay number awaam main kam se kam ter kerti ja rahi hai. I, the voter of this party have become opposed to it during the last year. yaar Army lao.... MUSHARRAF laoooooo.... nawaz sharif aur is ke sathioun ko phaansi na de ker jo ghalti ki thi woh sudharnay bulao MUsharraf ko............zinda baad musharraf.....murda baad N-league and PP both...tho tho tho ganjon per. apni chalti behnon per tax lagao...CGT + VAT + K-tax+ ganja tax
Title: Re: CGT -- Capital Gains Tax
Post by: Tezihunt on June 12, 2010, 06:28:01 PM
No substantial outcome of meeting between FBR member direct tax Asrar Rauf and KSE members. KSE MD Adnan Afridi said to CNBC TV that KSE delegation will meet with Finance ministry officials next week. He expressed his demands that the agreement signed between KSE and ex finance minister Shaukat Tareen should be honored (as there are rumors that GoP is considering to impose CGT even holdings of pre- July) and he said individual investors should not be made liable to return filings. But he did not indicated about any success in the today meeting with member FBR.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 12, 2010, 07:34:27 PM
(http://www.jang.com.pk/jang/jun2010-daily/12-06-2010/updates/6-12-2010_34530_1.gif)
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 12, 2010, 07:44:16 PM
KSE-FBR talks on CGT unfruitful
  Updated at: 1900 PST, Saturday, June 12, 2010      ShareThis story 
   
   KARACHI: The negotiations held between Karachi Stock Exchange (KSE) and Federal Board of Revenue (FBR) on the imposition of Capital Gains Tax (CGT) proved unfruitful.

Spokesman of FBR Israr Rauf paid a visit to KSE on Saturday and apprised KSE members about implementation of CGT.

He said mutual funds will enjoy exemption from CGT while 0.3 percent tax will be imposed on cash transactions which will not be applicable on stock market investors.

The FBR spokesman said the government will decide whether to end the tax exemption on accumulation of shares till June 30 or not. 
Title: Re: CGT -- Capital Gains Tax
Post by: mamu jee on June 12, 2010, 09:48:59 PM
No substantial outcome of meeting between FBR member direct tax Asrar Rauf and KSE members. KSE MD Adnan Afridi said to CNBC TV that KSE delegation will meet with Finance ministry officials next week. He expressed his demands that the agreement signed between KSE and ex finance minister Shaukat Tareen should be honored (as there are rumors that GoP is considering to impose CGT even holdings of pre- July) and he said individual investors should not be made liable to return filings. But he did not indicated about any success in the today meeting with member FBR.
Lgdhaa ha k SAAQEE nu Lamyaa Paa k Chhetar phaarny paan gy,Aadhee COAT PENT ta we CGT laoo,Aadhe nahaan ta we CGT Laoo.Aadhe Burger khaan tae we CGT laoo,Aadhae Ghusal Khany wich jaan ta we CGT Laoo,Aadhy Soon tae we CGT Laoo,Fher aanhoo samajh aaye ge CGT dhee,Kury Yawe dhaa putar,SAALAA Saneter bnya pher da hae,Aanhoo Gujhraa dhee hawaely wich Majhaaa choon ta hoona chhaedaa wae.                                              >:(   :bangin:  >:(
Title: Re: CGT -- Capital Gains Tax
Post by: 007 on June 13, 2010, 02:03:35 AM
 :spam:
Title: Re: CGT -- Capital Gains Tax
Post by: mamu jee on June 13, 2010, 08:18:30 AM
 :spam:
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 13, 2010, 10:19:34 AM
0.3 percent WHT not applicable on stocks investors: CGT before June 30 as per parliament decision: FBR member
AHMED MALIK
KARACHI (June 13 2010): The Federal Board of Revenue (FBR) has said that the 0.3 percent withholding tax on bank cheques, online transfers, pay orders, etc, will not be applicable to stock investors. Member Direct Tax, FBR Israr Rauf during his meeting with KSE members here on Saturday said this tax is only for cash transactions and will not be applicable for interbank transactions of the stock investors.

Various issues relating to imposition of taxes and others were discussed during the meeting. KSE members raised the issue of imposition of capital gains tax (CGT) and said that it should be imposed according to the agreement with the former finance minister Shaukat Tarin and the shares purchased before June 30, 2010 should be exempted from this tax.

However, Israr told the meeting that it would depend upon the Senate and National Assembly what they decide. However, he asked the KSE board to send their proposals regarding imposition of CGT and other issues. The FBR would discuss these issues with the finance ministry and other concerned authorities.

KSE members showed concern that paying quarterly advance tax would be too problematic for the retail investors. However, FBR official said that the quarterly statement is a self-assessment and there is no need to give supporting documents. It is just 2 percent if shares sold within 6 months and 1.5 percent between 6-12 months. On strong opposition from members, FBR officials said that they will get back to KSE soon on this matter after discussing internally.

The brokers also wanted FBR not to ask source of income for assets as of June 30, 2010. They said that as this gain was exempted for last more than 3 decades, investors have not declared this in their tax returns.

The FBR officials said that as far as investors can justify those gains then no question will be asked. Here again FBR will clarify this matter in coming days. Regarding tax on foreigners, the FBR official said that all investors will pay tax. Regarding the currency loss or gain, FBR believed that currency indexation is only done if foreigners re-invest. FBR has agreed that they will clarify this matter in next few days.

The meeting also discussed the issue of Senate standing committee recommendation that CGT should also be applicable on shares purchased before July 1, 2010. This is contrary to the understanding reached between KSE and Finance Ministry in February 2010 according to which CGT will be applicable on share purchases on or after July 1, 2010.

On this issue, the FBR official said that it depends upon the upper and lower house what they decide as the Finance Bill has yet not been passed by the parliament. Talking to media after meeting, the KSE Managing Director, Adnan Afridi, said that the agreement with former finance minister Shaukat Tarin should be fully honoured and the shares purchased before June 30, 2010 should be exempted from capital gains tax.

He said that CGT has been imposed after a long period of 36 years. "We want smooth imposition of this tax", he added. Adnan shared that the FBR officials clarified that 0.03 percent tax would be imposed only on interbank transactions and since all the transactions at KSE are made online so it would not be applicable for to stock investors.

He said that the issue of quarterly advance filing was also discussed in the meeting. Since the majority of small investors are unaware about the filing system and they should be given relaxation. "We want to increase our investors base to create more trading activities", he said, adding "We should facilitate small investors to increase our investors base".

KSE members including Haji Ghani, Abid Ali Habib and Zafar Moti also were of the view that imposition of CGT should be according to the agreement with Shaukat Tarin. They said that any move to scrap the agreement would affect market sentiment negatively.

Muhammad Sohail, leading analyst at Topline Securities, said clarification that 0.3 percent withholding tax will not be applicable to stock investors is slightly positive as there was fear that cost of buying and selling will increase substantially if 0.3 percent tax is imposed on bank payments.

Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 13, 2010, 10:21:39 AM
KSE, FBR discuss taxes on capital market

 By Tanveer Ahmed

KARACHI: Representatives of Federal Board of Revenue (FBR) and Karachi Stock Exchange (KSE) met here on Saturday to sort out the issues arising out of the various taxation measures on capital market in recently announced federal budget 2010-11.

FBR’s spokesman Israr Rauf who visited KSE clarified a number of issues that were creating resentments among the KSE members especially relating to imposition of Capital Gains Tax (CGT) on the stocks.

A participant of the meeting told Daily Times that though Israr Rauf gave a number of commitments regarding the queries about various tax measures, a ministerial level meeting would take up these issues thoroughly shortly.

“We can’t categorise these talks successful or unsuccessful because FBR’s officials just came to clarify the situation on different issues”, a senior member of KSE remarked when asked about the outcome of the meeting between both sides.

It is beyond the ambit of a bureaucrat, he added to give firm commitment on these issues and the matter would be discussed at the ministerial level. “Whatever Israr Rauf said was merely a formality and seemed to be a bureaucratic approach lacking a concrete and substantive thing”, he said.

Sources, however revealed that FBR officials committed that no compulsory audit of CGT statements would be required and hinted that 0.03 percent tax on online payments, pay orders, demand drafts and cheques would be withdrawn. CGT on sales of shares would be effective from July 01, 2010, however whether purchases before 30th June 2010 would be liable to tax or not is yet to be decided. Sources said that FBR representatives also indicated about the waiver of quarterly advance tax payments and members Withholding Tax 0.01 percent adjustable against the final liability. Sources said Israr Rauf assured that foreign investors would also be required to pay CGT.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 13, 2010, 10:52:55 AM
Positive

1. 0.3 percent withholding tax on bank cheques, online transfers, pay orders, etc, will not be applicable to stock investors -
2. Withholding Tax 0.01 percent adjustable against the final liability -
3. No cgt on mutual funds

Neutral to negative

3. FBR official said that the Advance Tax quarterly statement is a self-assessment and there is no need to give supporting documents. It is just 2 percent if shares sold within 6 months -
only rs 2000 if someone is making a profit of rs 100,000 is it too much ?

4. CGT on foreigners
5. CGT on sales of shares would be effective from July 01, 2010, however whether purchases before 30th June 2010 would be liable to tax or not is yet to be decided
6. The brokers also wanted FBR not to ask source of income for assets as of June 30, 2010. FBR officials said that as far as investors can justify those gains then no question will be asked
Title: Re: CGT -- Capital Gains Tax
Post by: Celebrations on June 13, 2010, 06:37:28 PM
(http://pakinvestorsguide.com/Emoticons_files/lol4.gif) 8800 - here I come.
:shoaby: :banana: :shoaby:
G mamu, phir kal ka kia dehaan hai?
Title: Re: CGT -- Capital Gains Tax
Post by: mamu jee on June 13, 2010, 06:43:51 PM
(http://pakinvestorsguide.com/Emoticons_files/lol4.gif) 8800 - here I come.
:shoaby: :banana: :shoaby:
G mamu, phir kal ka kia dehaan hai?
Mara Bhaata abe Qayem ha ,Still in  MCB and POL :shoaby: :banana: :shoaby:
Title: Re: CGT -- Capital Gains Tax
Post by: Research Doctor on June 13, 2010, 07:25:59 PM


[/quote]Mara Bhaata abe Qayem ha ,Still in  MCB and POL :shoaby: :banana: :shoaby:
[/quote]

mamu jee i asked some inquiry abt Bhatta in KSE100 thread. As u r expert in this field, plz reply me there. thanx
Title: Re: CGT -- Capital Gains Tax
Post by: Celebrations on June 14, 2010, 01:20:27 AM


Mara Bhaata abe Qayem ha ,Still in  MCB and POL :shoaby: :banana: :shoaby:
[/quote]

mamu jee i asked some inquiry abt Bhatta in KSE100 thread. As u r expert in this field, plz reply me there. thanx
[/quote]
Mene tau 10-jun ko lower caps per buy kia tha DGKC or Lucky - 11 ko DG ka uper cap huwa or luck b acha barha tau aaj subah inko bech kar AICL or Engro me batha banta hai - Chalo phir ka se dobara hum dono dost  :clap1: :biggrin: :banana: :biggrin: :clap1:
Title: Re: CGT -- Capital Gains Tax
Post by: momo on June 14, 2010, 08:49:37 AM
All these parliamentarians are idiots. They basically strangling the market. How are you going to collect taxes from investors, when there are not investors to tax and no one is trading any stocks. These idiots don't understand that if these rules come on too hard, people will run away from the capital markets. Instead of fostering growth and encouraging people to invest, they're discouraging them. Our politicians truly are idiots, with fake degrees, having no understanding on economics or how business is run.

They're barking a lot on imposing CGT on purchases before June 30th, 2010. None of these goons has said anything about imposition of tax on agriculture. Oh wait, it's because the majority of them own huge amounts of land and are involved in agriculture. None of them trade on the stock exchanges, so they don't care about what happens to investors.

Thanks.
Title: Re: CGT -- Capital Gains Tax
Post by: mamu jee on June 14, 2010, 08:58:01 AM


Mara Bhaata abe Qayem ha ,Still in  MCB and POL :shoaby: :banana: :shoaby:

mamu jee i asked some inquiry abt Bhatta in KSE100 thread. As u r expert in this field, plz reply me there. thanx
[/quote]
Mene tau 10-jun ko lower caps per buy kia tha DGKC or Lucky - 11 ko DG ka uper cap huwa or luck b acha barha tau aaj subah inko bech kar AICL or Engro me batha banta hai - Chalo phir ka se dobara hum dono dost  :clap1: :biggrin: :banana: :biggrin: :clap1:
[/quote]Well Come Sir :shoaby:
Title: Re: CGT -- Capital Gains Tax
Post by: makenamjad on June 14, 2010, 09:31:48 AM
Aik min. mein market 180n points negetive,,,,yeh kia ho rha hai???????????
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 14, 2010, 10:20:51 AM
Capital Gains - Lack of clarity on tax treatment
On Saturday Jun'12th 2010, a meeting between the representatives of the Federal Board of Revenue (FBR) and the members of Karachi Stock Exchange (KSE) was held to provide clarification on the exact modalities of the implementation of Capital Gains Tax (CGT). Although, no clear picture emerged from the discussions but nevertheless the meeting provided some direction on the prevailing issues including i) CGT on shares acquired before 30th Jun'10 ii) Advance tax on capital gains on stocks payable quarterly iii) applicability of CGT on mutual funds iv) Cost basis of shares for calculating CGT v)  Withholding tax related concerns amongst other factors.

CGT on investments acquired before 30th June 2010
As per the preliminary understanding, it was being perceived that capital gains tax will not apply to investments which were acquired prior to 30th Jun'10 (i.e. b/w Jun-09 to Jun-10) but divested later on in Jul'10 and beyond. However, the Finance Bill in its present form does not support this understanding and any capital gains being booked in tax year 2011 will be subject to CGT as per the rules. For e.g. if an investor acquired shares in Jul-Dec09 and sold on 1st Jul'10, any capital gains arising will be subject to 7.5% CGT while if the acquisition date is between Jan-Jun10, potential capital gains will be taxed at 10%.

Outlook
The lack of clarity on the modalities of the capital gains tax mechanism has brought in uncertainty to the share market keeping both local and foreign investors sidelined. Short term selling pressure is expected with investors booking gains before 30th June'10; however, we believe that most negatives pertaining to the capital gains tax are already priced in. The KSE -100 index currently trades at FY11 PE of 7.0x (based on IGI Universe). We reiterate our Dec10 index target of 10,960 which represents 15% upside from current levels. 

IGI Research
Title: Re: CGT -- Capital Gains Tax
Post by: 007 on June 14, 2010, 10:58:01 AM
ajj ki market nahin dekhi IGI waloon nay
Title: Re: CGT -- Capital Gains Tax
Post by: Saba-AL-khair on June 14, 2010, 11:16:22 AM
All these parliamentarians are idiots. They basically strangling the market. How are you going to collect taxes from investors, when there are not investors to tax and no one is trading any stocks. These idiots don't understand that if these rules come on too hard, people will run away from the capital markets. Instead of fostering growth and encouraging people to invest, they're discouraging them. Our politicians truly are idiots, with fake degrees, having no understanding on economics or how business is run.

They're barking a lot on imposing CGT on purchases before June 30th, 2010. None of these goons has said anything about imposition of tax on agriculture. Oh wait, it's because the majority of them own huge amounts of land and are involved in agriculture. None of them trade on the stock exchanges, so they don't care about what happens to investors.

Thanks.

100% agree with you regarding these corrupt bastards.............
:(
Title: Re: CGT -- Capital Gains Tax
Post by: 007 on June 14, 2010, 11:20:21 AM
CGT per govt ko daranay ki koshish ki ja rahee hai brokers ki taraf say

PS selling from ppl who are booking capital gains in fear of getting taxed, as exemption from tax on holding purchased before JULY seems to be gone :bigeyed:

time to buy in selected scrips
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 14, 2010, 11:23:30 AM
Feb-10 understanding with KSE rendered ineffective?
KSE has been bracing for impact of imposition of capital gains tax (CGT) since Feb-10 when an
understanding was reached between KSE and Ministry of Finance over broad modalities of CGT
(slabs in Table 1). However hopes of smooth implementation were dealt a severe blow over the
weekend once the matter was taken up by Senate Standing Committee on Finance. In addition, the
much hyped meeting of brokers and a senior tax official did not offer much clarity either which will
hurt sentiments further. Key takeaways from the meeting were:

Applicability on point of sale
PML (N) leader Senator Ishaq Dar passed a unanimous resolution in the Senate Committee that
CGT should be implemented on all securities (with a holding period less than 12M), sold post 1st
July 2010. This is a major deviation from the earlier understanding that CGT will only be applicable
on stocks purchased after 1st July and 30th June inventory would be tax free. If implemented, this
provides a case for investors with low cost purchases (in last 12M) to mark to market their positions
to avoid tax on unrealized gains to date…the trade off is that they would be nullifying their previous
holding periods. FBR official conceded that this was now a political rather than a taxation issue.

Mutual Funds – likely to be exempt from capital gains tax
In a separate meeting with domestic mutual fund representatives, the FBR official agreed that to
avoid double taxation, domestic mutual funds will not pay capital gains tax on transactions.
However mutual funds would withhold taxes of unit holders based on buying and selling price +
holding period of unit holders. Since the individual identity of unit holders can remain confidential
under this method, it will provide a competitive advantage to domestic mutual funds over direct
investments given the documentation shy nature of Pak investors in general.

Foreign investors – currency indexation can be considered
While the tax would also be applicable on foreigners, the FBR will now look at the possibility of
providing currency hedge to foreigners if they re-invest the proceeds in Pakistan capital markets.

Quarterly Advance tax could be reviewed
FBR contends that this is a facility to distribute cash flow burden of CGT and avoid concentrated
cash outflow at year-end. However on brokers’ insistence that low level of tax awareness would
make quarterly advance tax cumbersome, the FBR official agreed to a review but without a
commitment on outcome. On fears of harassment from tax officials, it was clarified that the tax is
on a self assessment basis where only random audits will be conducted. However this is not likely
to provide much comfort to investors extremely wary of dealing with taxmen.

Some understandings reaffirmed
1) 0.3% WHT will not apply on bank to bank transfers, 2) transaction taxes will be adjustable with
capital gains tax, 3) FIFO accounting would be followed while 4) tax losses can be carried forward.

Bottom line - General broker sentiment appears negative
Majority of questions pertaining to CGT are unanswered and the earlier understanding has been
negated which has left brokers agitated. In addition there is the fear of retail money fleeing KSE for
fear of documentation and hurting volumes further. Brokers are likely to take up the issues with the
Finance Minister later this week but till clarity emerges, KSE is likely to remain under pressure.
Title: Re: CGT -- Capital Gains Tax
Post by: makenamjad on June 14, 2010, 11:45:34 AM
CGT per govt ko daranay ki koshish ki ja rahee hai brokers ki taraf say

PS selling from ppl who are booking capital gains in fear of getting taxed, as exemption from tax on holding purchased before JULY seems to be gone :bigeyed:

time to buy in selected scrips

ity means that shares that were already purchased before july will also be taxed whenever sell?
Title: Re: CGT -- Capital Gains Tax
Post by: invincible on June 14, 2010, 12:32:43 PM
CGT per govt ko daranay ki koshish ki ja rahee hai brokers ki taraf say

PS selling from ppl who are booking capital gains in fear of getting taxed, as exemption from tax on holding purchased before JULY seems to be gone :bigeyed:

time to buy in selected scrips

ity means that shares that were already purchased before july will also be taxed whenever sell?

 

han yar, its is rumoured, but parliament has to finalise. Brokers tou mar mar k kutta kardengy mkt ko agar cgt 1st july se pehlay ki buying pe lag gaya tou.   :brickwall:  :down:  :smilestar:
Title: Re: CGT -- Capital Gains Tax
Post by: DK on June 14, 2010, 12:37:30 PM
CGT per govt ko daranay ki koshish ki ja rahee hai brokers ki taraf say

PS selling from ppl who are booking capital gains in fear of getting taxed, as exemption from tax on holding purchased before JULY seems to be gone :bigeyed:

time to buy in selected scrips

ity means that shares that were already purchased before july will also be taxed whenever sell?

 

han yar, its is rumoured, but parliament has to finalise. Brokers tou mar mar k kutta kardengy mkt ko agar cgt 1st july se pehlay ki buying pe lag gaya tou.   :brickwall:  :down:  :smilestar:
Sex And the City part 2 ....hahahahahaha :ohmy:
Title: Re: CGT -- Capital Gains Tax
Post by: Heart Breaker on June 14, 2010, 01:26:56 PM
Finance minister say meeting ki date kia hai kse members ki?
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 14, 2010, 03:01:40 PM
CAPITAL GAINS TAX: VALUABLE INSIGHT
Following a meeting held on Saturday between the Federal Bureau of Revenue (FBR)
and the Mutual Fund Association of Pakistan (MUFAP) we can now better infer the
treatment of the Capital Gains Tax (CGT) on mutual funds. Mutual Funds are ‘Pass
through vehicles’, hence the exemption to mutual funds from taxation will continue
subject to a distribution of 90% of their income.

Fixed Income Funds are Tax Exempt
While previously the treatment of fixed income mutual funds was uncertain, the
meeting concluded that unit holders of Mutual funds / Collective Investment Schemes,
categorized as income schemes, aggressive income schemes and money market
schemes (which do not trade in shares) shall be exempt from the purview of capital
gains tax. Therefore we understand that the treatment of fixed income mutual funds
remains unchanged and they continue to operate in a CGT free environment.

Equity Funds and the Incidence of Taxation
In line with our previous expectations, unit holders of equity funds are subject to CGT.
The unit holders of open end mutual funds / collective investment schemes
categorized as equity schemes (as per SECP circular 7 of 2009) shall be subject to
capital gains tax on the same rates and on the same holding period as applicable for
securities under section 37A.

As announced under the Finance Bill 2010, investments held for less than 6 months
will be liable for a CGT of 10%, investment between 6 to 12 months will be subject to
7.5% CGT and investment over 12 months will be tax exempt. Capital gains will be
adjustable against future losses over a five year period.

Moreover, it was decided that CGT would be deducted from the unit holder at the
redemption stage at the applicable tax rate and will deposit the with-held tax in the
government treasury every month. Thus, Asset Management Companies will act as
tax collection agents for unit holders.

We believe it is beneficial for the investor to bear the incidence of the tax. Firstly, an
investor can control the holding period of his investment. Moreover by holding the
investment for over 12 months, the investor can avoid any tax deductions while
capitalizing on short term trading opportunities.

The treatment of CGT on balanced and asset allocation funds is unclear. Using the
same rationale as that for equity schemes, we feel that unit holders of such funds may
need to pay CGT; however the portion of CGT that is levied on such funds is
uncertain.

Investments made prior to July 2010
Given the recently raised concerns by the Senate Standing Committee on CGT
exemption on securities purchased prior to July, 2010, the tax treatment of such units
still remains unclear.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 14, 2010, 03:29:44 PM
(http://www.jang.com.pk/jang/jun2010-daily/14-06-2010/updates/6-14-2010_34686_1.gif)
Title: Re: CGT -- Capital Gains Tax
Post by: gumnam on June 14, 2010, 07:57:05 PM
CALCULATE MY CGT
 
I buy  2000 mcb on 1/7
i short 4000 mcb on 30/12
i buy nml 6000 on 1/7
i short nml 12000 on 30/12
ibuy dgkc 10000  on1/7
i short dgkc 20000. on 30/12

i buy mcb 100000@ 200 on 17/7 and i short 200000  on upper lock on same date as i know it will lower lock at the end of the day my CGT?
i hold a item i keep the price of that item down. when i got some gain i put my gain into that stock and make
the price unchanged.
lot of other  head sipping way to make the FBR people dance on the  KSE flour not a single RS will pay in account of CGT by bhai log only ghafar suleman and youns etc will pay the CGT.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 14, 2010, 10:45:27 PM
(http://www.kse.com.pk/newsimage/017091-1.gif)
Title: Re: CGT -- Capital Gains Tax
Post by: Manzoor Khan on June 14, 2010, 10:48:41 PM
CGT is on profit so calculate the( money you have - money you bought with= Profit * 0.1= CGT )
 :rtfm:
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 14, 2010, 10:59:35 PM
(http://www.jang.com.pk/jang/jun2010-daily/14-06-2010/updates/6-14-2010_34748_1.gif)
Title: Re: CGT -- Capital Gains Tax
Post by: imran5654 on June 14, 2010, 11:06:08 PM
INSIDE NEWS...
                  kse members to involve farooq sattar in kse matter.some proposal.
to replace capital gain tax cgt with capital market tax.capital market tax will be deducted by brokers from client.means this will increase approx .01 paisa per share on commision slab.this will avoid documentation.next proposal is "every client making a profit of more than 5 lacs will have to file return quarterly.others will at the year end.next "old system of cfs will continue from 1 st july to support market and to avoid inhouse badla.so to differetaite real dilivery of a client from leverage delivery.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 15, 2010, 09:13:00 AM
CGT on shares sold after July 1: FBR chief
SOHAIL SARFRAZ
ISLAMABAD (June 15 2010): The Federal Board of Revenue Chairman Sohail Ahmed on Monday said the capital gains tax (CGT) would be applicable on securities being sold after July 1, 2010. On the conclusion of the Senate Standing Committee on Finance, the FBR Chairman told Business Recorder that the shares/securities being sold after July 1, 2010 would be subjected to the CGT.

"There is no confusion about the interpretation of law for applicability of the CGT on stock exchanges. "We are very clear on the issue of CGT on stock exchanges. As far as the Memorandum of Understanding is concerned, there is no such document signed between the Ministry of Finance and the Karachi Stock Exchange, which confirms that the CGT would not be applicable on securities purchased before June 30, 2010. Even if some kind of MoU existed, it has been specified that the CGT on stock exchanges would be applicable from July 1, 2010. However, the MoU has no legal status. "The Parliament is supreme and whatever it decides would be implemented," Sohail said.

The FBR Chairman categorically stated that the brokers have enjoyed CGT exemption for last many years and now the same lobby is once again active to create confusion on the applicability of the CGT on stock exchanges. The estimated revenue projections of Rs 5 billion under the head of the CGT has been worked out on the basis of collecting the levy from securities being sold after July 1, 2010.

In the meantime, the FBR Chairman informed the committee that the CGT would be applicable on the disposal of securities from July 1, 2010. "I fully endorse the viewpoint of the Senate Standing Committee on Finance as legal status specified by the committee is the accurate interpretation of the law. "My interpretation of the law is exactly the same as given by the committee. When officials of the Finance Ministry called me on the issue, the same legal interpretation has also been conveyed to the Finance Ministry officials. "Thus, we are crystal clear on the whole issue," he remarked.

He also clarified to the committee that the MoU has no status before the National Assembly/Senate. "I don't think that any such MoU has been duly signed between the Federation and the stock exchanges. The KSE had issued a press release at that time, but no MoU was signed," Sohail observed.

The FBR Chairman further informed the committee that the FBR will soon issue a clarifying amendment before submission of the recommendations of the committee to make clear the whole issue pertaining to the applicability of the CGT on stock exchanges. Sohail assured the committee that the FBR will convene a meeting with the Karachi Stock Exchange within the described parameters for taxation of the capital gains.

Senator Ishaq Dar reiterated that all the purchases of stocks are now documented with the Central Depository Company (CDC) and the FBR should approach the Securities and Exchange Commission of Pakistan (SECP) and the CDC for obtaining necessary data on securities. This would ensure that nobody would be able to tamper with the data pertaining to the holding period from the tax authorities.

Ishaq Dar was of the view that former finance minister Shaukat Tarin called him and totally agreed with him on the applicability of CGT on stock market. He said Tarin also supported the view point of the committee that there would be no exemption from CGT on shares purchased on or before June 30, 2010.

The FBR Chairman assured the committee that the FBR would obtain data from the CDC and the SECP for proper applicability of the CGT on securities. The Senate Standing Committee on Finance highly appreciated the response of the FBR Chairman on the issue of CGT on securities.

The whole issue was raised before the committee in its last meeting when Senator Ishaq Dar inquired about the status of securities purchased before June 30, 2010 regarding imposition of the CGT on stock exchanges. FBR Member Direct Taxes Policy had said that the CGT on securities would be applicable on purchases made from July 1, 2010. The exemption to the capital gain tax on stock exchanges would be available to securities purchased before June 30, 2010.

According to the FBR, the exemption from tax on Capital Gains on sales of shares/stock/securities, allowed for the purposes of capital formation is due to expire on June 30, 2010 Capital gains on sale of these stocks/shares/securities is proposed to be taxed from July 1, 2010.

This tax is to be charged as under: Where holding period of a stocks/shares/security is less than six months tax is to be charged at the rate of 10 percent. Where withholding period of the stocks/shares/security exceeds six months but it is not more than a period of twelve months, tax is to be charged at the rate of 7.5 percent. Also, in order to cater for the capital formation needs, no tax is chargeable on capital gains arising from securities held for a period of over 12 months, the FBR added.

Title: Re: CGT -- Capital Gains Tax
Post by: M&M on June 15, 2010, 09:25:59 AM
standing committee se hey ya finance minister se hey meeting   (http://pakinvestorsguide.com/Emoticons_files/confused1.gif)
Title: Re: CGT -- Capital Gains Tax
Post by: makenamjad on June 15, 2010, 10:56:18 AM
market possitive hai matlab issue resolve hony k chances hain??????????
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 15, 2010, 12:29:52 PM
(http://ejang.jang.com.pk/6-15-2010/images/04_15.gif)
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 15, 2010, 01:15:40 PM
(http://i49.tinypic.com/2nc31b8.gif)
Title: Re: CGT -- Capital Gains Tax
Post by: Manzoor Khan on June 15, 2010, 02:00:02 PM
market mix position mein hai matlab issue solve na hoi to.
 :brickwall: :brickwall: :brickwall:
Title: Re: CGT -- Capital Gains Tax
Post by: invincible on June 15, 2010, 02:13:03 PM
market mix position mein hai matlab issue solve na hoi to.
 :brickwall: :brickwall: :brickwall:
 

Mkt direction wil be set after tomw meeting wid Govt. so pray for d best.  :fingerscrossed1:
Title: Re: CGT -- Capital Gains Tax
Post by: makenamjad on June 15, 2010, 02:16:32 PM
market mix position mein hai matlab issue solve na hoi to.
 :brickwall: :brickwall: :brickwall:
 

Mkt direction wil be set after tomw meeting wid Govt. so pray for d best.  :fingerscrossed1:

hope CGT will not b applicable on holdings before 30 jun........ :biggthumpup:
Title: Re: CGT -- Capital Gains Tax
Post by: invincible on June 15, 2010, 02:19:23 PM
agar zardari ko thoda tax pay karen tou cgt se bach saktay hain-- its simple.. :banana:  :banana:  :shoaby:
Title: Re: CGT -- Capital Gains Tax
Post by: tariq^shah on June 15, 2010, 02:29:52 PM
agar zardari ko thoda tax pay karen tou cgt se bach saktay hain-- its simple.. :banana:  :banana:  :shoaby:

sahi kaha
Title: Re: CGT -- Capital Gains Tax
Post by: gumnam on June 15, 2010, 10:13:30 PM
 :ohmy: :ohmy: http://www.ummatpublication.com/2010/06/15/lead100.html
Title: Re: CGT -- Capital Gains Tax
Post by: makenamjad on June 16, 2010, 01:26:07 PM
agar zardari ko thoda tax pay karen tou cgt se bach saktay hain-- its simple.. :banana:  :banana:  :shoaby:

sahi kaha
2 SAAL PEHLAY ISI TERHA TO BACH GAY THAY,,,,,AB ZARDARI NAY ZAYADA % MAANG LI HO GI NA.... :skeptic:
Title: Re: CGT -- Capital Gains Tax
Post by: invincible on June 16, 2010, 01:35:23 PM
lagta hai zardari ko pay kardiya tax. it is rumoured cgt exemption til march.    :banana:  :banana:  :banana: :shoaby:  :shoaby:
Title: Re: CGT -- Capital Gains Tax
Post by: makenamjad on June 16, 2010, 02:35:50 PM
DO HAVE ANY LINK....CONFERMATION,,,,,PLZ SHARE..........IF IT IS THEN,,,,ITS REALY GOOOD NEWS FOR STOCK MARKET......... :banana: :banana: :banana:
Title: Re: CGT -- Capital Gains Tax
Post by: invincible on June 16, 2010, 02:38:29 PM
My friend has informed me-- let me make it confirmed. w8 til evening
Title: Re: CGT -- Capital Gains Tax
Post by: Heart Breaker on June 16, 2010, 02:38:52 PM
·         KSE members: FBR to surrender the function of tax collection to the brokers.

FBR may not give its right of collection of tax to brokers because govt. is very keen about collection of tax revenue from all industry. We believe, FBR may exempt the withholding tax to brokers because broker will be in the tax bracket after the implementation of capital gain tax.

 

·         KSE members: FBR to waive the requirement of filing quarterly returns

One of the objectives of CGT was to discourage speculation and quarterly returns were best solution to that end. The FBR need full check and balance on file return on quarterly basis because this will help them in the collection of Capital Gain Tax.

 

·         KSE members: FBR to exempt foreign portfolio investment from this levy or give currency depreciation allowance to foreign investors.

We believe FBR may give relaxation on account of foreign currency depreciation because we have seen foreign investment little far from our capital market in last few years.

 

·         KSE members: FBR to give up right to ask the source of invested funds

It’s strange to see the demand of broker to give-up right to ask the source of invested fund. According to our view FBR will not ease brokers, and will monitor it in the quarterly reports given by brokers. If FBR hold the power to check on the source of funds it may have significant negative impact on our capital market. 

 

·         The demand for tax exemption on stock purchases before June 30.

We believe FBR will give the exemption to the investors on the purchase before June 30 because it doesn’t make any sense to impose CGT on purchase of shares before June 30, 2010.

 
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 16, 2010, 10:28:33 PM
Pakistan to Tax Capital Gains on Shares Sold After July 1

June 16, 2010, 7:45 AM EDT

By Khaleeq Ahmed

June 16 (Bloomberg) -- A Pakistani panel of lawmakers said a capital gains tax on shares introduced in the federal budget will be imposed on stocks sold after July 1, rejecting an appeal by stockbrokers that purchases before June 30 be exempted.

Any shares sold after July 1 will attract a levy of 10 percent if they were held for less than six months and 7.5 percent for those held for between six months and a year, Sohail Ahmed, the chairman of the Federal Board of Revenue said at a meeting of the panel of lawmakers in Islamabad today. According to the budget, there will be zero tax for equities held longer.

Finance Minister Abdul Hafeez Shaikh announced in his annual budget speech on June 5 that a capital gains tax would be imposed for the first time since 1976. Former finance minister Shaukat Tarin, Shaikh’s predecessor, had agreed with the stock exchange the levy would be applied only on shares bought after July 1, according to Haroon Askari, operations manager at the exchange.

The panel also rejected a request by brokers’ that overseas investors be taxed in their currencies, Ahmed said today. Brokers had asked capital gains be levied in foreign currency for overseas investors to minimize their currency conversion losses.

The benchmark Karachi Stock Exchange 100 index, rose 2 percent to 9,436.88 at the close today, before the panel’s decision
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 17, 2010, 09:10:34 AM
CGT, income tax exemption: MoF does not agree with bourses' proposals
SOHAIL SARFRAZ
ISLAMABAD (June 17 2010): The Ministry of Finance has not agreed with the key proposals of all three stock exchanges ie capital gains tax (CGT) exemption for foreign investors, exemption from CGT on stocks purchased on or before June 30, 2010 and income tax exemption on transfer of assets of stock exchanges to demutualized exchanges.

During the meeting of National Assembly Standing Committee on Finance here on Wednesday, team of tax managers headed by FBR Chairman Sohail Ahmed shown its willingness to allow retail investors exemption from filing quarterly returns for advance tax. It would be seriously examined to allow small investors to file annual statements to facilitate them. "The proposals of the stock exchanges have been placed before the Finance Minister as well as FBR," the FBR Chairman said.

Officials of the Finance Ministry as well as FBR did not show any concurrence on other proposals floated by the stock exchanges. Member Direct Tax Policy Israr Rauf explained that under the modern concept of taxation, you have to pay tax when you earn. In the backdrop of this proposal, concept of quarterly returns was introduced in Pakistan. The quarterly tax payment is an adjustable tax and it is a statement of advance tax in case of gains, but not in case of losses.

The committee supported the proposal for allowing small investors to file annual statement/return as compared to the existing provision of advance tax payments. In the presence of representatives of the Karachi Stock Exchange (KSE), Lahore Stock Exchange (LSE) and Islamabad Stock Exchange (ISE), FBR Chairman Sohail Ahmed and Member Direct Tax Policy Israr Rauf made it clear to the stock exchanges that capital gains arising out of the shares purchases before June 30, 2010 would be taxed in case shares being sold on or after July 1, 2010. "The law is very clear in the Finance Bill (2010) about the applicability of the CGT on stock exchanges. The postponement of the CGT for another six months is not possible", Sohail Ahmed said.

Senior tax officials explained the committee that if the holding period of shares is less than six months 10 percent CGT to be applicable on such gains and 7.5 percent CGT to be applicable on gains arising out of selling of shares after six month but less than 12 months. However, there would be no CGT on shares to be held more than 12 months.

The FBR Chairman also clarified that Senate Standing Committee on Finance has already finalised its recommendations on applicability of CGT on stock market and there is no confusion over the applicability of CGT. He also informed the members of the committee that the FBR fully endorsed the recommendations of the Senate Committee on Finance.

Tax authorities also contested the figures presented by the managing Director KSE about the applicability of the CGT in regional countries. MD KSE shared data that there is no CGT on foreign and individual investment made in Bangladesh, Thailand, Singapore, Malaysia and other countries. The FBR officials informed the committee that the CGT is applicable in India with 20 percent rate, in China short term and long terms investments in securities are being taxed at the rate of 20 percent, and in Germany short-term gains are being taxed at 55.9 percent. Tax officials also informed that the global average rate of the CGT stood at 19.4 percent. In Pakistan, the government has proposed to introduce reduced rates of 10 and 7.5 percent.

Shahid Khaqan Abbasi and Khawaja Asif and members of the national assembly from PML (N) were satisfied with reply of the Chairman FBR that FBR fully agree to the recommendations of Senate Committee which has demanded that shares to be sold on or after July 1, 2010 should be taxed under the CGT regime introduced in budget.

The FBR Chairman was also of the view that poor people are bearing the burden of taxes and those who are earning more should also come forward and make contributions in the national kitty. Begum Shahnaz Wazir Ali MNA opposed the CGT exemption to foreign investors and opined that foreign investors also earn the profits on their investment why they should be exempted from the CGT.

Special Secretary Finance Asif Bajwa also opposed the CGT exemption for the foreign investors saying if we allow this it would result in dollarisation of economy. He also opposed the currency indexation for the foreign investors and warned that by virtue of this government would have to bear the foreign exchange risk.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 17, 2010, 10:26:29 AM
Individuals waived off the requirement to file quarterly advance CGT    
   
  According to a briefing held at KSE, it was clarified that National Assembly Standing Committee on Finance has recommended to exempt individual investors from filing quarterly returns on Capital Gains Tax (CGT). Moreover the committee will review the exact modalities of CGT for foreign investors, whereby possibility of currency indexation remains on cards. 
 The rest of the modalities on CGT stay intact, including consideration of ‘sale of securities’ as point of reference for calculation of CGT – implying that any securities sold after June 30, 2010 will be subject to CGT as per defined slabs, irrespective of when they were purchased. 
 In our view the development bodes well for the market as 50% of the traded volumes are contributed by retail investors who are now being saved from the hassle of filing quarterly returns. 
 With regards to securities purchased prior to July, 2010, it should be noted that exemption on holding period of over 12 months stays intact thereby neutralizing potential profit-taking ahead of CGT implementation. To put things into perspective: KSE100 posted a mere gain of 1% since Jan, 2010 while it posted a return of 32% since June 30, 2009. 
 
 
Title: Re: CGT -- Capital Gains Tax
Post by: M&M on June 17, 2010, 11:29:58 AM
Individuals waived off the requirement to file quarterly advance CGT    
   
  According to a briefing held at KSE, it was clarified that National Assembly Standing Committee on Finance has recommended to exempt individual investors from filing quarterly returns on Capital Gains Tax (CGT). Moreover the committee will review the exact modalities of CGT for foreign investors, whereby possibility of currency indexation remains on cards. 
 The rest of the modalities on CGT stay intact, including consideration of ‘sale of securities’ as point of reference for calculation of CGT – implying that any securities sold after June 30, 2010 will be subject to CGT as per defined slabs, irrespective of when they were purchased. 
 In our view the development bodes well for the market as 50% of the traded volumes are contributed by retail investors who are now being saved from the hassle of filing quarterly returns. 
 With regards to securities purchased prior to July, 2010, it should be noted that exemption on holding period of over 12 months stays intact thereby neutralizing potential profit-taking ahead of CGT implementation. To put things into perspective: KSE100 posted a mere gain of 1% since Jan, 2010 while it posted a return of 32% since June 30, 2009. 
 
 


I assume this is the sole reason behind the end of a  bearish trend ..
Title: Re: CGT -- Capital Gains Tax
Post by: Manzoor Khan on June 17, 2010, 03:57:51 PM
market is back to bullist trend.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 17, 2010, 10:07:31 PM
(http://www.jang.com.pk/jang/jun2010-daily/17-06-2010/updates/6-17-2010_35072_1.gif)
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 18, 2010, 09:43:09 AM

Life after capital gain tax


Mohammed Sohail
In spite of lobbying by investor/broker community, it looks like that the tax on share trading will be imposed and in a manner that suits the tax authorities.  It will be a big change for investors in local bourses who were exempt from capital gain tax (CGT) since last more than three decades. We believe that this new levy will affect volumes in short run but may not necessarily cause a bearish spell.
Individuals have                 
54pc share in daily trading
No doubt that retail investors are the most active segment in Pakistan with 54 per cent share in trading followed by companies with 29 per cent and foreigners with 6 per cent share. Most of these individual investors, we believe, are not used to declare their broker account in their annual tax statement. However in light of the fact that there had been similar situations in the country during the last 2 decades, one when automated trading was introduced and second when UIN was implemented etc.
We think that this time around as well the individual investors will adjust to this big change gradually. And this documentation eventually bodes well for the overall economy.
For companies, foreigners, mutual fund, etc the issue of filing returns and source of income will not be a problem while banks (having 7 per cent shares in trading) are already paying CGT.
Low volumes expected for  another quarter
Considering the fact that individuals trade 54 per cent of market and most of them square their position within a day, this new levy/documentation may affect their share in daily trading going forward. As mentioned, this cultural change may take some time for adjustment. We think that overall market depth would be affected. The second quarter average daily volume of Rs3.2 billion
($38mn) is far lower than $400-$600mn volume seen in 2005-2007.
Pakistan trading at FY11 PE of 6.7x
We maintain our Index target of 11500 by Dec 2010 as communicated through our strategy report released on December 29, 2009. Pakistan is currently trading at next year PE of 6.6x with dividend yield of 9 per cent compared to last 10-year average PE of 8.4x and dividend yield of 8 per cent. Our top picks include POL, PPL, Hubco, PSO, NRL and DGKC.
It will be a big change for investors in local bourses who were exempt from  capital gain tax (CGT) since last more than three decades. We believe that this new levy will affect volumes in short run but may not necessarily cause a bearish spell.
Writer is a research analyst at Top Line Securities
 
Title: Re: CGT -- Capital Gains Tax
Post by: Manzoor Khan on June 19, 2010, 02:07:04 PM
laga laine degiya tax farooq bhi tax ke baad market ko kaisa dekh rahe hain aap.
Title: Re: CGT -- Capital Gains Tax
Post by: Faraz Khan on June 20, 2010, 12:21:38 AM
Retail investors of stock exchanges: condition of filing quarterly returns for advance tax to go
SOHAIL SARFRAZ
ISLAMABAD (June 19 2010): The amended Finance Bill (2010) is expected to take away the condition for the retail investors/individuals of stock exchanges to file quarterly return for advance tax and continue income tax exemption on transfer of assets of stock exchanges to de-mutualised exchanges.

Sources told Business Recorder here on Friday that the government would introduce some major amendments in the Finance Bill (2010) to facilitate the business and trade. Under the proposed amendments in the Finance Bill (2010), the Federal Board of Revenue (FBR) is likely to allow the small investors to file annual returns to facilitate these individual investors.

In another move to facilitate demutualisation of stock exchanges, the income tax exemption would continue on transfer of assets of stock exchanges to de-mutualised exchanges. This one time exemption would be available to the stock exchanges under the amended Finance Bill. However, the status of capital gains tax (CGT) on stock exchanges would not be changed, sources added.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 22, 2010, 09:19:29 AM

Amended finance bill seeks to clarify CGT issues

RECORDER REPORT
ISLAMABAD (June 22 2010): The amended Finance Bill 2010 would clarify that short-term capital gains tax (CGT) would be applicable on securities to be sold after July 1, 2010. Sources told Business Recorder here on Monday that the FBR has introduced amendment in Finance Bill 2010 to clarify the applicability of the CGT on securities purchased before June 30, 2010.

Through amended Finance Bill, it has been clarified that the CGT would be applicable on securities purchased before June 30, 2010 or on June 30 or from July 1, 2010. "The CGT would be levied from the date on which the securities would be sold from July 1, 2010. There is no doubt about the legal position of applicability of the CGT, sources added.

According to sources, the FBR has amended the Finance Bill 2010 to clarify all issues relating to the CGT on stock exchanges. The amendments in the Income Tax Ordinance 2001 have been proposed in view of meetings with the stakeholders including representatives of stock exchanges at the level of Senate Standing Committee on Finance.

Sources said that the Karachi Stock Exchange (KSE) is showing steady performance during the last one week. The market has not witnessed any downward trend during the past one-two weeks. Presently, there is no abnormal situation in the stock market as market players are fully prepared to accept the CGT.

Some demands of the stock exchanges have been accepted to facilitate de-mutualisation of stock exchanges. However, the government has not accepted the demand of stock exchanges to grant the CGT exemption for foreign investors. The amended Finance Bill 2010 would abolish condition for the retail investors/individuals of stock exchanges to file quarterly return for advance tax and continue income tax exemption on transfer of assets of stock exchanges to de-mutualized exchanges.

Under the proposed amendments in the Finance Bill 2010, the FBR would allow the small investors to file annual returns to facilitate these individual investors. In another move to facilitate demutualisation of stock exchanges, the income tax exemption would continue on transfer of assets of stock exchanges to de-mutualized exchanges. This one-time exemption would be available to the stock exchanges under the amended Finance Bill.

Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 22, 2010, 09:24:53 AM
Amendment in Finance Bill 2010

Stock markets’ proposals likely to be accepted today

By Sajid Chaudhry

ISLAMABAD: The federal government is likely to accept two proposals related to the stock markets during its budget windup speech at the National Assembly, which is likely to be held today (Tuesday).

The proposals include allowing small investors to file their capital gains tax statements on annual basis rather than quarterly basis and restoration of exemption of income tax on transfer of capital assets of demutualised stock exchanges.

However, demands for CGT on shares purchased on or after July 1, 2010, and CGT exemption for foreign investors might be rejected, official sources informed here on Monday.

GST rate will stay at 17 percent during the first quarter of July to September, also, there would be no reduction or exemption from federal excise duty on (electricity intensive) electronic appliances.

The amended Finance Bill 2010 would clarify that the short-term capital gains on securities sold after July 1, 2010 would attract CGT, irrespective of when they were purchased.

Official sources informed that the Federal Board of Revenue (FBR) has introduced amendment in Finance Bill 2010 to clarify the applicability of CGT on securities purchased before June 30, 2009. Through amended Finance Bill, it has been clarified that the CGT would be applicable on securities purchased before June 30, 2010, on June 30, or after July 1, 2010. “The CGT would be levied from the date on which the securities would be sold from July 1, 2010,” it was said.

According to sources, the FBR has amended the Finance Bill 2010 to clarify all issues related to the CGT on stock exchanges. The amendments in the Income Tax Ordinance 2001 have been proposed in view of meetings with the stakeholders, including representatives of stock exchanges, at the level of Senate Standing Committee on Finance.

Sources said that the Karachi Stock Exchange has showed steady performance during the last one-week. The market has not witnessed any downward trend during the past one to two weeks. Presently, there is no abnormal situation in the stock market as it is ready to absorb the implementation of CGT.

Some demands of the stock exchanges have been accepted to facilitate demutualisation of stock exchanges. However, the government has not accepted the demand of stock exchanges to grant the CGT exemption for foreign investors. The amended Finance Bill (2010) would abolish condition for the retail investors/individuals of stock exchanges to file quarterly returns for advance tax and continue income tax exemption on transfer of assets of stock exchanges to demutualised exchanges.

Under the proposed amendments in the Finance Bill 2010, the FBR would allow the small investors to file annual returns. In another move to facilitate demutualisation of stock exchanges, the income tax exemption would continue on transfer of assets of stock exchanges to demutualised exchanges. This one-time exemption would be available to the stock exchanges under the amended Finance Bill.

However, the status of CGT on stock exchanges would not be changed, the sources added. Through the amended Finance Bill 2010, the powers of tax officials to take computers and related equipment from the business premises of registered persons would be withdrawn. As per the new amendment, tax officials would only be allowed to copy the relevant data of the registered taxpayers. The amended Finance Bill would also clarify the collection of withholding tax on banking transactions. Sources added that there would be no major change in tax rates announced in the budget 2010-2011. The reformed general sales tax would continue with the proposed rate of 17 percent. Sales tax exemption would be withdrawn by October 2010.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 24, 2010, 12:35:32 PM
Senate committee recommends CGT criteria (BR)

As per news paper reports, Senate committee has recommended charging CGT on sale of all
securities after 30th June, regardless of their purchase date. The CGT will be charged at 10% for
holding period of less than 6 months, 7.5% for holding period of 6-12 months while gains on more
than 1 year holding period will be tax free. The committee has also recommended that capital
losses should neither be adjusted against any other income and treated as a separate income
stream nor carried forward to the next year
. The finance bill including the recommendations will
now be presented to the National Assembly for further debate and final approval before its
implementation.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 26, 2010, 10:06:17 AM
It’s final now!: CGT to be levied on shares sold after June 30

* Shares purchased before July 1 also to be subject to CGT if sold on or after July 1

By Sajid Chaudhry

ISLAMABAD: With the approval of finance bill 2010, the National Assembly here on Friday empowered federal government to levy Capital Gains Tax (CGT) on securities sold on or after July 1, 2010 on selling point basis, even if they were purchased on or before June 30, 2010.

Small investors of the stock market have been exempted from quarterly payment of adjustable advance tax on capital gains from sale of securities. Mutual Fund or collective investment schemes shall deduct CGT on the basis of redemption of securities and according to the holding period.

Holding period of a security has also been defined and it has been mentioned that capital gains on sale of securities shall be reckoned from the date of acquisition (whether before, on or after the 30th day of June 2010) to the date of disposal of such security falling after the 30th day of June 2010.

CGT will applicable on shares of a Public Company, Voucher of Pakistan Telecommunication Corporation, Modarba Certificate and an Instrument of Redeemable Capital. Capital gains arising on or after July 1, 2010, from disposal of securities held for a period of less than a year, shall be chargeable to tax at the rates specified in Division VII of Part I of the first schedule. Provided that this section shall not apply to a banking company and an insurance company.

The definition of security has also bean explained under which security mean shares of a public company voucher of Pakistan Telecommunication Corporation, Modarba Certificate and an instrument of redeemable capital. Gains under this section shall be treated as separate block of income.

Where a person sustains a loss on disposal of securities in tax year, the loss shall be set off only against the gains of the person from any other securities chargeable to tax under this section and no loss shall be carried forward to the subsequent tax year.

According to the procedure given in the finance bill for adjustable advance tax on capital gains from sale of securities shall be chargeable as under, where holding period of a security is less than six month the rate of tax would be two percent of the capital gains derived during the quarter. Where holding period of a security is more than six months but less than 12 months, the rate of tax would be 1.5 percent of the capital gains derived during the quarter. Provided that such advance tax shall be payable to the commissioner within a period of seven days after close of each quarter.

Rate of capital gains to be paid under section 37A, where holding period of a security is less than six months, rate of tax will be 10 percent in fiscal 2011, 10 percent in year 2012, 12.5 percent in 2013, 15 percent in year 2014 and 17.5 percent in year 2015.

Where holding period of a security is more than six months but less than 12 months, rate of capital gains tax will be 7.5 percent in 2011, eight percent in 2012, 8.5 percent in year 2013, nine percent in year 2014, 9.5 percent in year 2015 and 10 percent in year 2016. A new provision has also been added in finance bill under which it has been clarified that where holding period of a security is more than 12 months no capital gains tax will be applicable.

Amendment approved in the finance bill 2010 made it mandatory for the mutual fund or a collective investment scheme to deduct capital gains tax on the basis of redemption of securities.
Title: Re: CGT -- Capital Gains Tax
Post by: Manzoor Khan on June 26, 2010, 10:31:03 PM
i think 2 % its ok  :goodc:
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 29, 2010, 09:21:54 AM
FBR to identify ‘black money’ involved in stocks trading
 
 
Tuesday, June 29, 2010
By Shahnawaz Akhter

KARACHI: The tax authorities are gearing up to identify investments made in the capital markets in an attempt to determine black money involved in trading following the successful imposition of the capital gains tax (CGT), sources at Federal Board of Revenue (FBR) told The News on Monday.

The government through the Finance Act 2010 approved the imposition of CGT on the sale of shares from July 1 that had remained exempted during the last three decades.“The filing of first return after the exemption withdrawal will provide an opportunity to the tax officials to identify the source of investment, which normally escaped to the exemption,” a FBR official said on the condition of anonymity.

The revenue body estimated that billions of rupees were involved in the trade, which has no proof of investors, the official said. “It will pave the way to approach those persons, who have not declared their money to the tax authorities,” the official said.

The official said that after filing of returns, including the details of CGT, the tax department would initiate preliminary assessment of the declared amount. “Later, cases where discrepancies be detected would be taken for forensic audit.”

The stock brokers will be filing income tax returns by September this year.Asrar Raouf, official spokesman and Member Direct Tax Policy, said that the capital gains tax has been imposed and after July 1 all the sale of shares would be liable for CGT as defined in the budget.

In the Budget 2010/11, the government had proposed 10 percent CGT on holding of shares below six months and 7.5 percent for holding less than 12 months. However, exemption is granted on holding of shares for more than one year.

Regarding questioning of source of investment, Raouf said that the cases would be treated as per the procedure and an audit would be started, which would be selected by computerised random balloting.

“However, any discrepancy detected in the preliminary scrutiny of the cases will be audited even those are not selected in the random balloting,” Raouf said.

The stock markets receive two types of investments, ie, local investment and portfolio investment. “The authorities have no authority to question the portfolio investment as it was made through foreign fund managers,” another official at the revenue body said. “However, the local investment will be questioned,” the official said.

Various transactions took place at the stock exchanges where the identity of local investors was not cleared. “This will provide the opportunity to increase the tax base,” the official said.During the previous regime, the provision to question existed, but due to exemption mostly returns were not filed, the official said.

During the outgoing year, the tax department in Karachi had created around Rs1 billion tax demands against the stockbrokers, which was either evaded or avoided.“A sum of Rs70 million is paid in cash by the brokers against the demand,” an official at the Regional Tax Office said. Meanwhile, Rs100 million is detected as evasion, which was wrongly claimed by the stockbrokers under the head of withholding tax, the official added.
 
Title: Re: CGT -- Capital Gains Tax
Post by: M&M on June 29, 2010, 09:28:39 AM
"..The stock brokers will be filing income tax returns by September this year" ?????
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 29, 2010, 09:51:07 AM
"..The stock brokers will be filing income tax returns by September this year" ?????

yes
Title: Re: CGT -- Capital Gains Tax
Post by: M&M on June 29, 2010, 09:54:55 AM
"..The stock brokers will be filing income tax returns by September this year" ?????

yes

matlab brokers hi dainge cgt on behalf of individual investors ya ye doosre taxes ki baat horahi hey ?
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 29, 2010, 10:19:18 AM
"..The stock brokers will be filing income tax returns by September this year" ?????

yes

matlab brokers hi dainge cgt on behalf of individual investors ya ye doosre taxes ki baat horahi hey ?

brokers jo gains karain ge un ki baat ho rahi hai

Title: Re: CGT -- Capital Gains Tax
Post by: M&M on June 29, 2010, 11:13:26 AM
"..The stock brokers will be filing income tax returns by September this year" ?????

yes

matlab brokers hi dainge cgt on behalf of individual investors ya ye doosre taxes ki baat horahi hey ?

brokers jo gains karain ge un ki baat ho rahi hai



okay.
Title: Re: CGT -- Capital Gains Tax
Post by: 007 on June 30, 2010, 02:28:35 AM
Capital Gains tax related clarities

n      Any stocks sold after June 30th 2010 will be taxed based on holding period ( This is  bad for the investors )

n      Individual investors will not be required to file quarterly advance tax  This is just positive.

n      Capital Gains will be treated as a separate block of income.

          Loss on securities can only be adjusted in the year of occurrence and not carried forward ( This is also negitive for the investors. )

n      Equity mutual funds will deduct capital gains tax of unit holders based on holding period and cost while debt/ money market funds will be exempted from capital gains tax.

n      Bonus shares will be treated as acquired at zero cost ( mean first you got hit when your stocks open Ex price and then you have to pay CGT. its mean better sell on spot. )

"coutesy T2"
Title: Re: CGT -- Capital Gains Tax
Post by: EHSAN on June 30, 2010, 06:24:44 AM
tell me any one, if we sell some items on loss , will CGT be charged on it
Title: Re: CGT -- Capital Gains Tax
Post by: M&M on June 30, 2010, 09:34:40 AM
tell me any one, if we sell some items on loss , will CGT be charged on it

only if it was CLT .. No, it wont be charged.
Title: Re: CGT -- Capital Gains Tax
Post by: SS on July 01, 2010, 11:43:46 AM

only if it was CLT .. No, it wont be charged.
[/quote]


Minimum kitni salana income per CGT Charge hoga ????????
Title: Re: CGT -- Capital Gains Tax
Post by: M&M on July 01, 2010, 12:07:14 PM

only if it was CLT .. No, it wont be charged.


Minimum kitni salana income per CGT Charge hoga ????????
[/quote]

acha sawal hey .. my understanding is that even if u earn 10Rs/year, u have to give cgt on that. I wish there was some minimum cap.
Title: Re: CGT -- Capital Gains Tax
Post by: Manzoor Khan on July 01, 2010, 02:51:31 PM
Capital Gains tax related clarities

n      Any stocks sold after June 30th 2010 will be taxed based on holding period ( This is  bad for the investors )

n      Individual investors will not be required to file quarterly advance tax  This is just positive.

n      Capital Gains will be treated as a separate block of income.

          Loss on securities can only be adjusted in the year of occurrence and not carried forward ( This is also negitive for the investors. )

n      Equity mutual funds will deduct capital gains tax of unit holders based on holding period and cost while debt/ money market funds will be exempted from capital gains tax.

n      Bonus shares will be treated as acquired at zero cost ( mean first you got hit when your stocks open Ex price and then you have to pay CGT. its mean better sell on spot. )

"coutesy T2"

Dhiyan 01 - Take position at 9,500   Back
 
By:  Muzammil Musani


JS Global Capital
Market may be range bound with dull volumes till July end as there exist uncertainties about capital gains tax and there are no triggers. However, we can see some improved activities as leverage product is expected to be launched while CGT related concerns would be cleared. Launch of a leverage product, foreigner's interest and good corporate results would trigger the market. Investors are advised to gradually invest at 9,500 levels in fertiliser, OMC and cement sectors. Market may be bullish today.
 
Title: Re: CGT -- Capital Gains Tax
Post by: 007 on July 01, 2010, 06:06:41 PM
 :ohmy:
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on July 06, 2010, 02:56:03 PM
Bourses reeling under the effects of CGT!
One does not need to have the brains of Einstein to understand the sole reason behind the
pathetic volumes and sheer lack of interest at the bourses. The imposition of CGT means
that most retailers would have to be prepared at any time to explain their sources of
income to the taxmen. While we understand that this issue has been blown out of
proportions, one can not downplay its perceived threat faced by individuals.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on July 07, 2010, 09:20:30 AM
No adjustment of losses against CGT in later years  
 
Finance Act

Wednesday, July 07, 2010
By Javed Mirza

KARACHI: The Finance Act 2011 has unveiled another cause of concern for the stock market as the adjustment of losses on sale of securities against capital gains tax (CGT) cannot be carried forward to the next year.

According to the rules and regulations of CGT, the loss on sale of securities is adjustable against the tax on capital gains made on other securities.

However, this adjustment credit cannot be carried forward if it is not obtained in the year when the losses were incurred.

“Where a person sustains a loss on disposal of securities in a tax year, the loss shall be set-off only against the gain of the person from any other securities chargeable to tax and no loss shall be carried forward to the subsequent tax year,” says the Finance Act.

Analysts said that CGT had been haunting the bourse for the last couple of months, which was evident from the lacklustre performance of the market.

The Finance Act also says that the gains on sale of securities would be treated as a separate block of income. This means the person involved in shares trading would have to mention separately gains or losses made on the sale of securities in tax returns. In case there were no gains and no loss, a nil return would have to be filed.

Tax officials said that this would help in documenting this section of the economy.

Ahsan Mehanti, Chief Executive Officer at Shahzad Chamdia Securities, said that the market was still apprehensive about CGT.

“There is a lot of confusion regarding CGT and its implication and things are still not clear. That is why market participants have adopted a cautious stance.”

CGT will be applicable at 10 percent rate if securities are held for a period less than six months and at 7.5 percent rate if the securities are held for a period less than a year but more than six months.

Gains on sale of securities held for a period over one year have been exempted from CGT.

But these rates are not applicable in case of banking companies and insurance companies. Their gains will be taxed at a uniform rate of 10 percent.
 
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on July 09, 2010, 08:59:37 AM
Sections 19 & 111 of Income Tax Ordinance 2001: stockbrokers, members not exempted
SOHAIL SARFRAZ
ISLAMABAD (July 09 2010): Brokers and investors of the stock exchanges are not exempted from Section 19 (speculation business) and Section 111 (unexplained income or assets) of the Income Tax Ordinance 2001. A senior FBR official told Business Recorder here on Tuesday that all relevant sections of the Income Tax Ordinance 2001 would be applicable on stock brokers and members of the stock exchanges.

The Income Tax Ordinance 2001 would be equally applicable on the stockbrokers like other registered persons. For example, section 19 (speculation business) and section 111 (unexplained income or assets) would be applicable on persons engaged in buying and selling of shares.

The applicability of the capital gains tax (CGT) would be further clarified through the rules to be jointly drafted by the FBR and the KSE in view of relevant provisions of the Finance Act, 2010. The income tax rules and regulations would also be applicable on stockbrokers like any other businessmen operating under the provisions of the Income Tax Ordinance 2001. The stock market is like any other sector and all relevant rules and regulations would also be applicable on stockbrokers.

According to section 19 of the Ordinance 2001, where a person carries on a speculation business that business shall be treated as distinct and separate from any other business carried on by the person. The section 67 (Apportionment of deductions) shall apply as if the profits and gains arising from a speculation business were a separate head of income.

Any profits and gains arising from the speculation business for a tax year computed in accordance with this "Part" shall be included in the person's income chargeable to tax under the head "Income from Business" for that year. In this section (19), "speculation business" means any business in which a contract for the purchase and sale of any commodity (including stocks and shares is periodically or ultimately settled otherwise than by the actual delivery or transfer of the commodity.

The first meeting of the FBR-KSE committee on Capital Gains Tax (CGT) will be held at Karachi Stock Exchange (KSE) here on Friday (today). The FBR team would be headed by Member Direct Tax Policy and FBR official spokesperson Israr Rauf, whereas KSE team included Managing Director Adnan Afridi, Arif Habib, Yasin Lakhani, Dawood Jan Muhammad and Farrukh Waqaruddin Junaidi. The committee would discuss the modalities for smooth implementation of CGT on share trading. The investors concerns over the imposition of CGT would also be discussed during the meeting.

During last visit of Federal Finance Minister Dr Abdul Hafeez Sheikh to the KSE, he directed the tax collecting authorities not to harass the taxpayer investors during filing their returns of newly imposed CGT on shares trading. Finance Minister had assured the stockbrokers that their source of income would not be asked while filing their returns of capital gains tax. "Although there is a law, and the government can ask the source of income of anyone while filing returns, this law should not be used to harass the taxpayers," he added during his visit to the KSE.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on July 09, 2010, 09:00:55 AM
FBR-KSE body meeting on CGT today
RECORDER REPORT
KARACHI (July 09 2010): The first meeting of FBR-KSE joint committee on Capital Gains Tax (CGT) would be held at Karachi Stock Exchange on Friday, July 9. The committee comprising representatives from both sides will discuss the modalities for smooth implementation of CGT. The FBR team would be headed by Member Direct Tax Israr Rauf while MD Anan Afridi would be leading the KSE side.

Sources said the investors concerns including declaration of their source of income while filing returns of CGT would also come up for discussion during the meeting. The matter of notices to some stockbrokers by the FBR seeking their investors' details including the NTN numbers, etc, would also be raised in the meeting.

The brokers have demanded withdrawal of these notices. They said they should not be used as vehicle to determine all these details of their investors. Sources said a proposal would also be given to the FBR that the investors having total quantum of Rs 20 million of investment should be exempted from query about their source of income. After imposition of CGT on share trading from July 1, 2010, trading activity at KSE has declined drastically. The local retail investors having almost 50 percent share in total daily trade are on the sidelines adopting wait and see policy.

They are eyeing the outcome of the FBR-KSE joint committee meeting and expecting a positive development in this regard, sources said. Finance Minister Dr Abdul Hafeez Shaikh announced to constitute this joint committee during his visit to Karachi Stock Exchange. The joint committee was given the task to resolve all related issues and investors concerns over the imposition of CGT. Market participants are also expecting positive outcome of the joint committee meeting.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on July 09, 2010, 09:26:35 AM
KSE’s demands on CGT not likely to be accepted by FBR

ISLAMABAD: The Federal Board of Revenue (FBR) is not likely to accept the demand of the Karachi Stock Exchange (KSE) officials for giving them special treatment under Section 19 dealing with speculative business as well as Section 111 on unexplained income or assets under the Income Tax Ordinance, 2001. According to the official sources, these two major sections of the Income Tax Ordinance, 2001 would be applicable on stockbrokers and members of the stock exchanges, as they would be treated at par with other taxpayers with no extra concession. The Income Tax Ordinance 2001 would be equally applicable on the stockbrokers like other registered taxpayers. Citing an example, the official informed that Section 19 (speculation business) and Section 111 (unexplained income or assets) would also be applicable on persons engaged in buying and selling of shares. The applicability of the capital gains tax (CGT) would be further clarified through the rules to be jointly drafted by the FBR and the KSE keeping in view relevant provisions of the Finance Act, 2010. A Joint FBR-KSE Committee constituted by FBR for finalisation of CGT Rules would also deliberate today (Friday) on the applicability of Section 19 on speculation business and Section 111 on unexplained income or assets. The income tax rules and regulations would also be applicable on stockbrokers like any other businessmen operating under the provisions of the Income Tax Ordinance, 2001. The stock market is like any other sector and all rules and regulations would also be applicable on stockbrokers. The first meeting of the FBR-KSE committee on CGT will be held at the KSE here on Friday. The FBR team is headed by Member Direct Tax Policy and FBR official spokesperson Israr Rauf, whereas KSE team includes Managing Director Adnan Afridi, Arif Habib, Yasin Lakhani, Dawood Jan Muhammad and Farrukh Waqaruddin Junaidi. sajid chaudhry

Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on July 10, 2010, 10:19:35 AM
Stock players may be asked to disclose source of income: joint committee takes up CGT issue
AHMED MALIK
KARACHI (July 10 2010): The Federal Board of Revenue (FBR) on Friday made it clear that the source of income of stock players would be questioned while filing returns of capital gains tax (CGT). "The government has given amnesty to market players in 2007 and now it is not possible to give further amnesty," Member Direct Tax Israr Rauf said this after FBR-KSE joint committee meeting held at KSE here on Friday.

The joint committee meeting was held to discuss investors concerns and various other issues related to implementation of CGT on share trading. The FBR-KSE committee was constituted on the directive of Finance Minister Dr Abdul Hafeez Shaikh during his visit to Karachi Stock Exchange last month. Israr Rauf said the assembly has passed the law and now it is not possible to amend it, he added. He said the committee discussed the procedure and regulations for implementation of CGT. He pointed out that investors reservations regarding implementation of CGT was discussed in detail during the meeting and various issues have been resolved.

He said a sub-committee has been constituted that will give recommendations for smooth implementation of CGT. He said the regulations for implementation of CGT would be approved once the sub-committee recommendations are discussed with the higher authorities.

The KSE statement issued after the meeting said the senior team of the FBR led by Asrar Raouf, Member Tax Policy, met with representatives of the Karachi Stock Exchange to address issues related to capital gains tax. A consensus was reached on achieving taxpayer facilitation to ensure widening of the tax net. Confidence building measures to achieve this include:

1. The committee considered various proposals to avoid hardships to taxpayers. A sub-committee comprising members from the FBR and Karachi Stock Exchange was constituted to consider the same.

2. The FBR will set up a separate cell for facilitation of foreign investors at LTU and RTO. This information will be provided to the stock exchange.

3. Financing income/markup under securities lending and borrowing regulations, margin financing and any other leverage products as approved by SECP, would be taxed at the rate of 10 percent, as full and final tax.

4. Gain or loss under day trading and trading in derivative products would be subject to CGT under section 37A of the Income Tax Ordinance.

5. Suggestions of the exchange with reference to carry forward of capital losses was discussed and shall be given due consideration.

6. All other modalities with respect to computation of CGT were agreed upon.
Title: Re: CGT -- Capital Gains Tax
Post by: Celebrations on July 11, 2010, 04:25:55 PM
Stock players may be asked to disclose source of income: joint committee takes up CGT issue
AHMED MALIK
KARACHI (July 10 2010): The Federal Board of Revenue (FBR) on Friday made it clear that the source of income of stock players would be questioned while filing returns of capital gains tax (CGT). "The government has given amnesty to market players in 2007 and now it is not possible to give further amnesty," Member Direct Tax Israr Rauf said this after FBR-KSE joint committee meeting held at KSE here on Friday.

The joint committee meeting was held to discuss investors concerns and various other issues related to implementation of CGT on share trading. The FBR-KSE committee was constituted on the directive of Finance Minister Dr Abdul Hafeez Shaikh during his visit to Karachi Stock Exchange last month. Israr Rauf said the assembly has passed the law and now it is not possible to amend it, he added. He said the committee discussed the procedure and regulations for implementation of CGT. He pointed out that investors reservations regarding implementation of CGT was discussed in detail during the meeting and various issues have been resolved.

He said a sub-committee has been constituted that will give recommendations for smooth implementation of CGT. He said the regulations for implementation of CGT would be approved once the sub-committee recommendations are discussed with the higher authorities.

The KSE statement issued after the meeting said the senior team of the FBR led by Asrar Raouf, Member Tax Policy, met with representatives of the Karachi Stock Exchange to address issues related to capital gains tax. A consensus was reached on achieving taxpayer facilitation to ensure widening of the tax net. Confidence building measures to achieve this include:

1. The committee considered various proposals to avoid hardships to taxpayers. A sub-committee comprising members from the FBR and Karachi Stock Exchange was constituted to consider the same.

2. The FBR will set up a separate cell for facilitation of foreign investors at LTU and RTO. This information will be provided to the stock exchange.

3. Financing income/markup under securities lending and borrowing regulations, margin financing and any other leverage products as approved by SECP, would be taxed at the rate of 10 percent, as full and final tax.

4. Gain or loss under day trading and trading in derivative products would be subject to CGT under section 37A of the Income Tax Ordinance.

5. Suggestions of the exchange with reference to carry forward of capital losses was discussed and shall be given due consideration.

6. All other modalities with respect to computation of CGT were agreed upon.

Nice suggestions - Lets hope 4 de best
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on July 15, 2010, 09:29:06 AM
FBR to use market data for CGT collection

ISLAMABAD: The Federal Board of Revenue (FBR) plans to collect detailed market data from three stock exchanges for the FY2009-10 ended on June 30, 2010 to use it for maximum collection of Capital Gains Tax (CGT), imposed from July 1 under the current fiscal year’s budget.

The move is based on recognition within the FBR that full benefit of the CGT could not be realised unless that it had full data about the market transactions as on June 30 which should become the basis for assessment during the current fiscal year of the newly imposed tax on capital market investments, informed sources told Dawn.

The sources said the FBR authorities were finding it difficult to understand the tax evasion techniques that the market players may be employing through relaxations allowed under an agreement with the government team to have annual returns from individual stock investors instead of quarterly returns.

The FBR has been alerted by some private experts that it had made a mistake by allowing annual returns instead of originally planned quarterly returns because these were the individual accounts that hold the most of the unaccounted for money, commonly described as black money. The sources said the individual investors usually parked some of this money in benami accounts, sometimes in fake names and fictitious addresses.

These sources pointed out that had the individual investors been made to pay advance tax with quarterly returns as originally decided, the black money investors would have attempted to leave the stock market but two forces would have been at work to deter their exit.

First, mass exits within three months before the first return became due, resulting in market drop at considerable capital losses. Second, the market could have touched a level where the black money investors’ capital losses would have exceeded their tax liabilities on their unexplained stock investments. The concession for individual investors to file annual returns has changed the whole scenario, they said.

Now the black money will have one year to exit the market, avoiding capital losses and tax liabilities at the same time because FBR may not be able to find any trace of those who decide to leave the market with their black money transferred to unknown destinations.

They said the brokers’ community also succeeded in another intricate move when they persuaded the FBR to continue with exemption from CGT on the capital assets to be transferred from the present bourses to the demutualised stock exchanges after demutualisation.

The brokers wilfully preferred the gains from their monopoly in present stock exchanges to the benefits of tax exemption on demutualisation for the last three years.

They said the move by the Securities and Exchange Commission of Pakistan to allow margin financing that was discontinued after the 2008 market crash. It would help brokers to charge hefty interest rates on margin financing loans, promote speculation and inflate trading volumes and multiply brokerage commissions.

But more than that the margin financing will help brokers and their clients to substitute black money with borrowed money and provide an easy answer where the funds to purchase the shareholdings present in a particular account came from.

The FBR authorities have now been informed that it will be difficult, if not impossible, to find after one year when the return became due that it has in reality got nothing from its insistence to tax the shareholdings purchased before July 1, 2010. By that time, however, the black money with all the gains would have completed its exit and the borrowed money would have affected its entry and replaced the black money in stock market.

It is in this background that the FBR now wanted to call the records of investors and their shareholdings as on June 30, 2010 independently from stock brokers and Central Depository Company.
Title: Re: CGT -- Capital Gains Tax
Post by: M&M on July 15, 2010, 09:43:00 AM
lol
Title: Re: CGT -- Capital Gains Tax
Post by: DK on July 15, 2010, 10:07:48 AM
 :clap1: A PUBLIC SERVICE MESSAGE  :clap1:

 :arrowhead: support the government, kill your self and take somebody innocent with you :arrowhead:
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on July 17, 2010, 09:20:29 AM
Holding period to be calculated from date of acquisition: FBR clarifies CGT on shares
RECORDER REPORT
ISLAMABAD (July 17 2010): The Federal Board of Revenue on Friday issued an explanatory circular for the capital gains tax (CGT) on stock exchanges, clarifying that the holding period of securities will be calculated from the date of acquisition (whether before or after June 30, 2010) to the date of disposal of such security falling after June 30, 2010.

The FBR has also announced that the capital gains on disposal of securities will be taxed as a separate block of income and shall be charged on capital gain arising to securities holders irrespective of taxpayer's tax (exemption) status. According to the explanatory circular on CGT issued by the FBR here on Friday, the government has also imposed capital gains tax (CGT) on disposal of securities by insurance companies.

The FBR has further clarified that the exemption from CGT available to a collective investment scheme registered with SECP/mutual fund has been restricted only to the investment by such schemes/funds, which are debt or money market funds. Explaining the tax on capital gains on disposal of securities, the FBR said that on expiry of exemption on tax on capital gains, capital gains arising on disposal of securities have been made chargeable to capital gains tax through newly introduced section 37A of the Income Tax Ordinance 2001.

For the purposes of capital gain tax (CGT), "securities" mean share of a public company, voucher of Pakistan Telecommunication Corporation, Modaraba Certificate, an instrument of redeemable capital and derivative products. The Capital gain tax shall be chargeable on capital gain arising from securities disposed off on or after July 1, 2010. However, the capital gain tax shall not be chargeable on disposal of securities, which are held for a period of more than one year.

The adjustment of losses on disposal of securities in a tax year shall be adjustable only against the gain from disposal of any other securities and such loss shall not be carried forward to a subsequent tax year. About the applicability of the CGT on banking company and on insurance company, the FBR said that the provision of section 37AA are not applicable to an insurance company and a banking company as CGT in these cases is governed under the provisions of Fourth Schedule and the Seventh Schedule to the Income Tax Ordinance 2001, respectively.

The explanatory circular said that a new proviso has been inserted under clause (103) Part-I of the Second Schedule to the Income Tax Ordinance, 2001whereby exemption from CGT available to a collective investment scheme registered with SECP/mutual fund has been restricted only to the investment by such schemes/funds which are debt or money market funds. Thus CGT is now chargeable on the unit holders of such schemes/funds at the time of redemption of a security by the unit holder and a collective investment scheme/mutual fund shall be responsible to deduct tax (at the prescribed CGT rates as given below) on redemption of securities. Such tax shall be adjustable against the overall CGT liability, and tax so deducted shall be payable to the relevant Commissioner Inland Revenue within seven days of its deduction.

The rate of capital gain tax under section 37A as specified in Division VII of Part I of the First Schedule to the Income Tax Ordinance, 2001 are as follows: Where holding period of a security is less than six months, rate of tax would be 10 percent for Tax Year 2011. Where holding period of a security is less than six months, rate of tax would be 10 percent for Tax Year 2012; 12.5 percent tax for tax year 2013; 15 percent for tax year 2014 and where holding period of a security is less than six months, rate of tax would be 17.5 percent for tax year 2015.

Where holding period of a security is more than six months but less than 12 months, the rate of tax would be 7.5 percent for the Tax Year 2011; 8 percent for the Tax Year 2012; 8.5 percent for Tax Year 2013; 9 percent for Tax Year 2014; 9.5 percent for Tax Year 2015 and where holding period of a security is more than six months but less than 12 months, the rate of tax would be 10 percent for the Tax Year 2016. Where holding period of a security is more than one year, rate of tax would be zero percent.

The FBR has also clarified imposition of the Capital Gains Tax payable by the insurance companies. Rules (6B) and (6C) have been introduced under the Fourth Schedule of the Income Tax Ordinance, 2001, for levy of CGT on disposal of securities by insurance Companies. The "Securities" shall have the same meaning as defined under Section 37A.

The CGT on insurance companies is chargeable at the following rates: Where withholding period of securities is less than six months, rate of tax would be 10 percent for Tax Year 2011; 12.5 percent for Tax Year 2012; 15 percent for Tax Year 2013; 17.5 percent for Tax Year 2015 and where withholding period of securities is less than six months, rate of tax would be 17.5 percent for Tax Year 2015.

Where withholding period of securities is more than six months but less than 12 months, rate of tax would be 8 percent for Tax Year 2011; 8.5 percent for Tax Year 2012; 9 percent for Tax Year 2013; 9.5 percent for Tax Year 2014 and where withholding period of securities is more than six months but less than 12 months, rate of tax would be 10 percent for Tax Year 2015. The FBR has further clarified that no CGT shall be chargeable on disposal of securities held for a period of more than one year by an insurance company. The loss on disposal of securities sustained in a tax year shall be set off only against the gain from any other securities chargeable to tax in the hands of such insurance company. No loss shall be carried forward to the subsequent tax year, income tax circular added.

Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on July 18, 2010, 11:01:21 AM
First-in first-out method’ proposed for CGT calculation
 
Sunday, July 18, 2010
By Shahnawaz Akhter

KARACHI: The Income Tax Bar Association (ITBA) on Saturday recommended first-in first-out (FIFO) method for capital gains tax (CGT) on the sale of securities of the same companies in stock exchanges.

“The method is practiced in those countries where the capital gains tax is applicable on stock exchanges,” Ali A Rahim, President ITBA, said.

Under this method, when an investor purchases some shares of a company and later purchase more shares at different rates of the similar company the tax department should treat the rates on disposal of securities, which were purchased earlier.

Rahim said that the bar had recommended first-in first-out method for taxability of scripts sold within one year.

The tax bar has sent recommendations on the Finance Act 2010 to the Federal Board of Revenue (FBR) in which it demanded the revenue body to notify rules on priority basis.

The tax bar said that under the new laws the mutual funds are now required to deduct the capital gains tax as rates specified in the Income Tax Ordinance, 2001. “However, there is no corresponding provision in the main law, which requires the mutual funds to deduct such tax,” it said.

In its recommendations, the tax bar identified that the flat rate of taxability in cases of association of persons (AoPs) would discourage small and medium business formation.

The chargeability of income tax at 25 percent on AoPs for the tax year 2010 is harsh, discriminatory and its retrospective effect is likely to be challenged before the judicial for a, the ITBA president said.

“It suggested that either the old reign of taxation is to be retained or the applicability of this charge is to be made effective from the tax year 2011,” he said.

Regarding advance tax, the bar recommended that the previous regime of advance tax should be retained as far as the dates of advance tax for companies are concerned as the payment of advance under the new scenario tax might create shortfalls, which will entail penalties. “The law as per the Finance Act, 2010 will create a lot of difficulties and is not practical,” the bar said.

On the issue of cash withdrawal from financial institutions, it advised that the online transfer of funds of the same taxpayer between various cities and towns should not come in the ambit of this law.

Another major issue raised by the tax bar was deduction on air line tickets. The ITBA said, “Clarification is required as to who will be the deducting authority as withholding agent whether it will be the airline or the travel agent,” it said.

The tax bar suggested that marginal relief should be provided in computation of the income tax for non-salaried individuals. The bar said that when income increases from Rs300,000 to Rs300,001 the resultant income tax will be charged at Rs22,500, which is not logical. “The tax of Rs22,500 on inclusion of Re1 is illogical and in violation under the constitution,” it said.

Under the Sales Tax Act, 1990, the revenue body selected cases and noticed discrepancies, but so far it was not shared with the taxpayers. The tax bar said, “The discrepancies, which are already in the knowledge of the FBR, should be brought in the knowledge of the taxpayers in writing with reasonable time for reply.”

In the cases where reply of the taxpayer found unsatisfactory, those taxpayers can be selected for audit and intimated accordingly, it added.

The association also highlighted another issue regarding sales tax registration, saying recently the revenue body issued two circulars, which provides that the Sales Tax Registration Number (STRN) would not be used as reference of Sales Tax Registration and only National Tax Number (NTN) will be considered as STRN.

“The STRN is still being issued after July 1, which is against the instructions contained in the circulars,” it pointed out.

The tax bar also said that the circular issued in 2007 stated that no person would hold two sales tax numbers at a time. In case of a taxpayer it is observed that where a person holds two STRN, what will be the position of claiming input and output tax in the presence of two STRN. The association urged the revenue body to remove the anomaly.
 
Title: Re: CGT -- Capital Gains Tax
Post by: DK on July 19, 2010, 10:13:57 AM
First-in first-out method’ proposed for CGT calculation
 
Sunday, July 18, 2010
By Shahnawaz Akhter

KARACHI: The Income Tax Bar Association (ITBA) on Saturday recommended first-in first-out (FIFO) method for capital gains tax (CGT) on the sale of securities of the same companies in stock exchanges.

“The method is practiced in those countries where the capital gains tax is applicable on stock exchanges,” Ali A Rahim, President ITBA, said.

Under this method, when an investor purchases some shares of a company and later purchase more shares at different rates of the similar company the tax department should treat the rates on disposal of securities, which were purchased earlier.

Rahim said that the bar had recommended first-in first-out method for taxability of scripts sold within one year.

The tax bar has sent recommendations on the Finance Act 2010 to the Federal Board of Revenue (FBR) in which it demanded the revenue body to notify rules on priority basis.

The tax bar said that under the new laws the mutual funds are now required to deduct the capital gains tax as rates specified in the Income Tax Ordinance, 2001. “However, there is no corresponding provision in the main law, which requires the mutual funds to deduct such tax,” it said.

In its recommendations, the tax bar identified that the flat rate of taxability in cases of association of persons (AoPs) would discourage small and medium business formation.

The chargeability of income tax at 25 percent on AoPs for the tax year 2010 is harsh, discriminatory and its retrospective effect is likely to be challenged before the judicial for a, the ITBA president said.

“It suggested that either the old reign of taxation is to be retained or the applicability of this charge is to be made effective from the tax year 2011,” he said.

Regarding advance tax, the bar recommended that the previous regime of advance tax should be retained as far as the dates of advance tax for companies are concerned as the payment of advance under the new scenario tax might create shortfalls, which will entail penalties. “The law as per the Finance Act, 2010 will create a lot of difficulties and is not practical,” the bar said.

On the issue of cash withdrawal from financial institutions, it advised that the online transfer of funds of the same taxpayer between various cities and towns should not come in the ambit of this law.

Another major issue raised by the tax bar was deduction on air line tickets. The ITBA said, “Clarification is required as to who will be the deducting authority as withholding agent whether it will be the airline or the travel agent,” it said.

The tax bar suggested that marginal relief should be provided in computation of the income tax for non-salaried individuals. The bar said that when income increases from Rs300,000 to Rs300,001 the resultant income tax will be charged at Rs22,500, which is not logical. “The tax of Rs22,500 on inclusion of Re1 is illogical and in violation under the constitution,” it said.

Under the Sales Tax Act, 1990, the revenue body selected cases and noticed discrepancies, but so far it was not shared with the taxpayers. The tax bar said, “The discrepancies, which are already in the knowledge of the FBR, should be brought in the knowledge of the taxpayers in writing with reasonable time for reply.”

In the cases where reply of the taxpayer found unsatisfactory, those taxpayers can be selected for audit and intimated accordingly, it added.

The association also highlighted another issue regarding sales tax registration, saying recently the revenue body issued two circulars, which provides that the Sales Tax Registration Number (STRN) would not be used as reference of Sales Tax Registration and only National Tax Number (NTN) will be considered as STRN.

“The STRN is still being issued after July 1, which is against the instructions contained in the circulars,” it pointed out.

The tax bar also said that the circular issued in 2007 stated that no person would hold two sales tax numbers at a time. In case of a taxpayer it is observed that where a person holds two STRN, what will be the position of claiming input and output tax in the presence of two STRN. The association urged the revenue body to remove the anomaly.
 


 :dunno: well what about the share transfered to another share holder directly rather than purchased from the market  :dunno:                                 a little hlp here farzooq ::)
Title: Re: CGT -- Capital Gains Tax
Post by: umer on July 23, 2010, 02:36:03 AM
I have a very simple question that if I bought shares in month of May 2010 and want to sale in July 2010 or August 2010 will CGT impose on sale of my shares or not kindly reply
Title: Re: CGT -- Capital Gains Tax
Post by: Research Doctor on July 23, 2010, 03:33:43 AM
I have a very simple question that if I bought shares in month of May 2010 and want to sale in July 2010 or August 2010 will CGT impose on sale of my shares or not kindly reply
yes surely. All shares sold after 30 june will be charged with CGT, no matter when they were bought.
Title: Re: CGT -- Capital Gains Tax
Post by: kSE001 on July 24, 2010, 10:10:23 AM
Capital gain in a year which is half million or less is exempt from tax or not plz someone clarify the point ?  :thanks:
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on July 24, 2010, 11:47:01 AM
Capital gain in a year which is half million or less is exempt from tax or not plz someone clarify the point ?  :thanks:

not exempted
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on September 01, 2010, 10:42:19 AM
CGT on stock exchanges: new rules to clarify certain concepts
SOHAIL SARFRAZ
ISLAMABAD (September 01 2010): The new income tax rules for capital gains tax (CGT) on stock exchanges would clarify that trading period of less than one day would be considered for calculation of the 'holding period' to impose the CGT on stock exchanges. The FBR would particularly clarify the concepts of "wash trade" and the "cross trading" under the new rules on 'computation of capital gain'.

The transactions taking place under the cover "wash trade" and the "cross trading" would be checked through the draft CGT rules. This would ensure that the data of actual transactions would be available to the tax department and it would help in checking the phenomenon of "wash trade" as well as "cross trading".

Sources told Business Recorder here on Tuesday that the FBR is drafting new rules on the CGT in consultation with Karachi Stock Exchange (KSE). The FBR has decided to clarify a number of issues of stock exchanges through the new rules to be issued before October 7 ie date for filing of quarterly statements by the investors in stock exchanges.

Under the draft rules, securities held for a period 182 days and for a period of 365 days may be taken as held for six months and one year respectively. The securities held for less than one day may be treated as held for less than six months. Sources said that trading of shares at the stock exchanges for less than one day period would not be exempted from the CGT. The trading taking place in less than one day period would be considered for the calculation of the CGT. The issue of trading in less than one day at stock exchanges would be dully clarified through the new CGT rules.

The CGT is a transaction based-tax and exemption would be available as specified in the law. Where holding period of a stocks/shares/security is less than six months tax is to be charged 10 percent. Where withholding period of the stocks/shares/security exceeds six months but it is not more than a period of twelve months, tax is to be charged at the rate of 7.5 percent. No tax is chargeable on capital gains arising from securities held for a period of over 12 months.

The FBR rules would ensure that the CGT should be properly paid by the broker community for which legal issues would be clarified under the new CGT rules. One of the important issues is exemption from filing of quarterly statements by individual investors covering small/retail investors.

The FBR would put in place some mechanism to ensure that big companies or Association of Persons would not declare themselves as small individuals for obtaining exemption from quarterly filing of returns. Under the proposed CGT rules, the FBR may give responsibility to the brokers to ensure that investors liable to file quarterly statement should submit the same. The FBR would specify some kind of responsibilities of the brokers in this regard under the new CGT rules.

Following exemption to retail investors from filing of quarterly return for advance tax, they may be allowed to file annual statements to facilitate these individual investors. Under the proposed CGT rules, the FBR will issue comprehensive procedure for computation of capital gain tax CGT on shares trading at the stock exchanges to clarify issues related to acquisition and disposal dates of shares.

The FBR draft rules have clarified issues pertaining to date of securities acquisition, their disposal, holding period, derivative products and miscellaneous issues with respect to buying and selling of shares at the stock exchanges. The FBR will propose amendments in the Income Tax Rules, 2002 through an SRO for issuance of the draft rules on 'computation of capital gain' for the information of all persons likely to be affected. The rules would also explain the method to determine date of acquisition of different/various securities, disposed of, for the purpose of determination of holding period.

The FBR will further clarify that only express and specific exemptions in respect of income from 'capital gains' as provided under the second schedule to the Income Tax Ordinance, 2001, shall apply for the purposes of taxation of income from 'capital gains' arising from disposal of securities. The loss suffered on disposal of securities during the period of a tax year shall be set off against capital gains from disposal of securities during such tax year, irrespective of the period of holding of such securities in such tax year, sources added.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on September 09, 2010, 10:10:30 AM
In cases of Wash sales, Cross trade and Tax Swap Sale: no adjustment of losses admissible under CGT rules
SOHAIL SARFRAZ
ISLAMABAD (September 09 2010): The Federal Board of Revenue (FBR) has decided not to allow adjustment of losses on disposal of securities at the stock exchanges in cases of "Wash sales", "Cross trade" and "Tax Swap Sale". No adjustment of loss arising in cases of "Wash sales", "Cross trade" and "Tax Swap Sale" shall be admissible under the CGT rules, the FBR rules said.

The FBR on Wednesday issued draft of the procedure on computation of capital gains tax on stock market through amendment in the Income Tax Rules 2002. According to the draft rules, loss suffered on disposal of securities during the period of a tax year shall be set off against capital gains from disposal of securities during such period irrespective of the period of holding of such securities in such tax year. However, no such adjustment of loss arising in the following cases shall be admissible:

"Wash sales": Where capital loss realised on sale of specific share by an investor is preceded or followed in one month's period by purchase of the same share by the same investor, thus maintaining the portfolio).

"Cross trade": Where co-ordinated reshuffle of shares between two related accounts of the same investor, between two related account of the related investor or between two membership cards of the same broker is undertaken and share accumulating unrealised losses are sold to related accounts to realise artificial losses in one account without actually selling the shareholdings to an outsider and artificial losses so realised in an account are then used to minimise capital gain tax liability on the capital gains realised in the same account.

"Tax Swap Sales": Where the investor having realised loss (as in the case of wash sale) on a particular share does not repurchase the same share but chooses another similar share in the same sector thus not only minimising or eliminating altogether CGT liability but also maintaining the portfolio broadly at the same risk return profile.

The FBR rules further said that the securities held for less than one day shall be treated as held for less than six months. Where contract for the purchase and sale of securities is periodically or ultimately settled by the actual delivery, the period between the date of acquisition and date of disposal shall be reckoned as the holding period. In case of derivative products, the period between the date of entry into contract of purchase or sale and date of exit from contract of purchase or sale shall be taken as the holding period.

In case of securities not traded on trading platforms (including Platform for Off Market Transactions) provided by Stock Exchanges, the period between date of acquisition and date of disposal, shall be taken as the holding period. The FBR further said that the method to determine date of acquisition of various securities disposed of, for the purpose of determination of holding period to be employed consistently shall be "First In First Out" (FIFO).

To determine the cost of acquisition of securities the method to be employed consistently, at the option of the person holding such securities, shall be either "Moving Weighted Average Cost method" or "Specific Identification Cost method on FIFO basis". The profit made on sale of borrowed shares shall be treated as capital gain when such shares are acquired for their return to Authorised Intermediary.

Period intervening between acquisition and disposal of such borrowed shares shall determine the "holding period" in which the capital gain or loss falls. "Specific Identification Method" shall be used to determine the acquisition cost and consideration for disposal of such securities.

The difference between cost of acquisition and consideration received against disposal (net off all borrowing costs) of such shares shall be treated as capital gain or loss. This rule shall be applicable to the securities borrowed in accordance with the "Securities Lending and Borrowing Scheme" approved by Securities and Exchange Commission of Pakistan.

Profit made on disposal of shares acquired under Margin Finance Scheme, Margin Trading Scheme or other Financing or Leverage schemes approved by Securities and Exchange Commission of Pakistan shall be treated as 'capital gain'. The difference between cost of acquisition (inclusive of borrowing cost) and consideration received against disposal of such shares shall determine the quantum of capital gain or loss.

The adjustable advance tax payable under section 147(5B) shall be payable within a period of twenty-one days after the each quarter where the same cannot be paid within seven days after close of each quarter, due to practical difficulties, draft rules added.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on September 27, 2010, 12:31:41 PM
Debate on CGT rules continues (BR)
As per newspaper reports, The Federal Board of Revenue (FBR) and the Karachi Stock Exchange
(KSE) are extensively discussing issues of 'Wash sales', 'Cross trade' and 'Tax Swap Sale' before
notifying the procedure for computation of capital gain tax on stock markets. When these issues
are settled between the tax authorities and the bourses, the FBR is likely to notify the new rules
next week.
Title: Re: CGT -- Capital Gains Tax
Post by: asimsaim on September 27, 2010, 09:23:33 PM
Debate on CGT rules continues (BR)
As per newspaper reports, The Federal Board of Revenue (FBR) and the Karachi Stock Exchange
(KSE) are extensively discussing issues of 'Wash sales', 'Cross trade' and 'Tax Swap Sale' before
notifying the procedure for computation of capital gain tax on stock markets. When these issues
are settled between the tax authorities and the bourses, the FBR is likely to notify the new rules
next week.

 I have a feeling ,, Market  ka Bhatha  CGT kay baad betha hay ..     :laugh:   (others may share my feeling). 

Is ko khatam karain kisee tarah.   When even the majority of  our  law makers (I mean parliamentarians) do not pay taxes. 

They are not willing to stop money Laundering .. how market can move .. mujhay to lagta hay , yeh foriegners kee buying bee IMF he kar raha hay takay , bilkul he  na beth jay.   
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on October 19, 2010, 12:01:46 PM
FBR may extend CGT filing date (BR)
Reportedly, FBR may extend the quarterly CGT (Capital Gains Tax) filing deadline for
institutional investors beyond 21st October. This is the first time the filings were required
after Govt announcement to introduce CGT at the bourses. The FBR extended its first
deadline of 7th October however it still has not finalized modalities for CGT calculation. The
board has yet to finalize the treatment of “wash trades” and “cross trades” for the tax
calculation purpose. Recall that 10% CGT will apply on gains from trades with holding period
of less than six months, 7.5% on trades with holding period of 6?12 months while gains from
holding period of over 1 year will be tax free.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on December 21, 2010, 11:23:55 PM
Draft CGT rules sent for vetting
RECORDER REPORT
ISLAMABAD  (December 21, 2010) : The Federal Board of Revenue (FBR) has sent, for vetting to Law and Justice Division, the draft of the 'Capital Gains Tax (CGT) Rules 2010', to be applicable on stock exchange investors. Sources told Business Recorder here on Monday that the FBR would notify the CGT rules after clearance from the Law and Justice Division.

The FBR will amend the Income Tax Rules 2002 for issuance of procedure on computation of capital gains tax on stock market. Once the new amendment is incorporated in the CGT Rules 2010, the rules would be applicable on the investors of stock exchanges. It is expected that the new rules would be immediately issued after clearance from the Law Division.

Under the CGT Rules 2010, the Board would not allow adjustment of losses on disposal of securities at the stock exchanges in cases of "Wash sales", "Cross trade" and "Tax Swap Sale". No adjustment of loss arising in cases of "Wash sales", "Cross trade" and "Tax Swap Sale" shall be admissible. According to the draft of rules, loss suffered on disposal of securities during the period of a tax year shall be set off against capital gains from disposal of securities during such period irrespective of the period of holding of such securities in such tax year.

Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on January 18, 2011, 07:46:05 PM
KARACHI: Federal Board of Revenue (FBR) has announced the schedule for submission of Capital Gains Tax (CGT) returns, Geo News reported Monday. According to the notice issue by Karachi Stock Exchange (KSE), the investors of stocks can submit up to January 21, 2011 CGT returns of July-December 2010 The returns of the third quarter of the current fiscal will be submitted till April 21 2011 while the last date for submitting returns of fourth quarter is June 21, 2011
Title: Re: CGT -- Capital Gains Tax
Post by: Tezihunt on January 18, 2011, 08:47:06 PM
These dates are not for retail investors. Retail investors will submit annually in sep 2011.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on February 13, 2011, 10:45:37 AM
FBR issues SRO for computing CGT
RECORDER REPORT

ISLAMABAD  (February 13, 2011) : Every investor, other than individual investors of stock exchanges, shall e-file statement of advance tax on capital gain within seven days after the end of each quarter.

According to SRO 112(1)/2011, issued here on Saturday by the Federal Board of Revenue (FBR) on computation of capital gain on disposal of securities, every investor shall calculate tax on capital gain arising on securities held for a period up to six months, and above six months to one year, after the end of each tax year at the prescribed rates.

Every investor, other than individual investor, shall e-file statement of advance tax on capital gain on the prescribed format within seven days after the end of each quarter with the tax authority having jurisdiction in the case.

The capital gains tax (CGT) rules said that the liability to pay the due tax on capital gain shall lie on the investor who held the securities during the period for which tax on capital gain is to be paid and, in case of any 'benami' accounts, on the investor who de facto owns the securities carried in such accounts.

Every investor shall maintain accounts and records separately for each of his brokerage accounts regarding his securities' business which should sufficiently enable verification of the discharge of his obligations under these rules. Without prejudice to the generality of the foregoing provision, every investor shall maintain in particular the following accounts and records: Fortnightly ledger statements of the investor's brokerage account or each brokerage account if there are more than one account whether in the investor's own name or any benami accounts, generated by his broker; fortnightly CDC statements of the investor's CDC sub account or each CDC sub-account corresponding to each brokerage account, if there are more than one brokerage account whether held in the investor's own name or any benami accounts; record of security holdings and their value carried in the investor's brokerage account as on 30th June of each year; record of cash carried in the investor's brokerage account as on 30th June of each year; record of funds deposited in the investor's brokerage account; and record of funds withdrawn from the investor's brokerage account.

About the holding period, the rules said that the securities held for a period up to a maximum of one eighty-two days and for a period up to a maximum of 365 days shall be taken as held for six months and one year respectively. In case of short positions, holding period shall be the period intervening between the date when a security is sold short and the date when the security is purchased to cover the short position.

In case of futures contracts, holding period shall be the period intervening between the date of entry into a futures contract and the date of exit from such contract.

The rules said that the capital gain or loss arising on the disposal of any security shall be computed on the basis of First In First Out (FIFO) inventory accounting method. Capital loss arising on disposal of securities in any tax year shall be set off against capital gain arising from the disposal of securities during that tax year to determine the taxable capital gain arising from the disposal of securities. (3) Capital loss arising on disposal of securities in any tax year shall not be carried to a subsequent tax year.


Title: Re: CGT -- Capital Gains Tax
Post by: M&M on February 13, 2011, 12:50:01 PM
Tax clearance certificate made mandatory: stock exchange investors

SOHAIL SARFRAZ

ISLAMABAD  (February 13, 2011) : The Federal Board of Revenue (FBR) has made it mandatory for investors of stock exchanges to obtain 'tax clearance certificate' from respective tax authorities for clearance of their tax liabilities of capital gains tax (CGT) before closure of their brokerage account with the stock brokers.

The FBR on Saturday amended Income Tax Rules 2002 through an SRO 112(1)/2011 to notify procedure on computation of capital gains tax on stock market. A new rule (13J Liability of broker) has been included in the Income Tax Rules.

According to the rules, every broker or stock exchange member, before closing the brokerage account of an investor, shall require an investor to obtain a tax clearance certificate from the concerned tax authority to the effect that the investor has no tax liabilities outstanding against him.

Any broker or stock exchange member who closes an investor's brokerage account without obtaining a tax clearance certificate and the investor disappears from the market without satisfying the tax authorities that he has no tax liabilities outstanding against him, such broker shall be liable to discharge such investor's outstanding tax liabilities to the satisfaction of tax authorities, rules added.

When contacted, an analyst explained that if any investor of stock exchange wants to close his account, the broker would direct the investor to obtain tax clearance certificate from the concerned Regional Tax Office (RTO) about the clearance of his tax liabilities. The broker would ask the investor, intending to close the account, to submit the certificate confirming clearance of the tax liability. However, if the investor disappears from the market without submitting the certificate to the broker, the concerned stockbroker would be responsible for the clearance of his tax liability.

Experts said that the clause of 'tax clearance certificate' would ensure clearance of the CGT liabilities of the brokers. In this case, the brokerage house would be given responsibility to obtain the certificate from the concerned investor, they added.

Source:
yes (http://www.brecorder.com/news/top-stories/1154531:tax-clearance-certificate-made-mandatory-stock-exchange-investors.html)
Title: Re: CGT -- Capital Gains Tax
Post by: invincible on February 13, 2011, 01:15:50 PM
Tax clearance certificate made mandatory: stock exchange investors

SOHAIL SARFRAZ

ISLAMABAD  (February 13, 2011) : The Federal Board of Revenue (FBR) has made it mandatory for investors of stock exchanges to obtain 'tax clearance certificate' from respective tax authorities for clearance of their tax liabilities of capital gains tax (CGT) before closure of their brokerage account with the stock brokers.

The FBR on Saturday amended Income Tax Rules 2002 through an SRO 112(1)/2011 to notify procedure on computation of capital gains tax on stock market. A new rule (13J Liability of broker) has been included in the Income Tax Rules.

According to the rules, every broker or stock exchange member, before closing the brokerage account of an investor, shall require an investor to obtain a tax clearance certificate from the concerned tax authority to the effect that the investor has no tax liabilities outstanding against him.

Any broker or stock exchange member who closes an investor's brokerage account without obtaining a tax clearance certificate and the investor disappears from the market without satisfying the tax authorities that he has no tax liabilities outstanding against him, such broker shall be liable to discharge such investor's outstanding tax liabilities to the satisfaction of tax authorities, rules added.

When contacted, an analyst explained that if any investor of stock exchange wants to close his account, the broker would direct the investor to obtain tax clearance certificate from the concerned Regional Tax Office (RTO) about the clearance of his tax liabilities. The broker would ask the investor, intending to close the account, to submit the certificate confirming clearance of the tax liability. However, if the investor disappears from the market without submitting the certificate to the broker, the concerned stockbroker would be responsible for the clearance of his tax liability.

Experts said that the clause of 'tax clearance certificate' would ensure clearance of the CGT liabilities of the brokers. In this case, the brokerage house would be given responsibility to obtain the certificate from the concerned investor, they added.

Source:
yes (http://www.brecorder.com/news/top-stories/1154531:tax-clearance-certificate-made-mandatory-stock-exchange-investors.html)


Any impact on mkt of CGT news?
Title: Re: CGT -- Capital Gains Tax
Post by: M&M on February 13, 2011, 01:28:49 PM
currently, nothing's more important than Pak-Us relation - if market could go up on foreign inflows, it could well come down on the same account. 16th feb is market holiday so i'm expecting volatile trading.
Title: Re: CGT -- Capital Gains Tax
Post by: fasee on February 13, 2011, 01:51:06 PM
why closed on 16th..??
Title: Re: CGT -- Capital Gains Tax
Post by: invincible on February 13, 2011, 01:55:21 PM
why closed on 16th..??


!2th Rabi-ul-awal. Kabhi masjid bhi jaya karou bhai  :s1:
Title: Re: CGT -- Capital Gains Tax
Post by: fasee on February 13, 2011, 02:20:23 PM
lolz....thanks for telling.

i knew 12 rabiulawal was this week...ddint knew on what day of feb
Title: Re: CGT -- Capital Gains Tax
Post by: Poker Face on February 13, 2011, 06:04:37 PM
CGT wala kaam to dawn news ki front page story ka kamal hai. Saale aur kuch nahi mila in ko yeh chap diya ke "ab tak 1 paisa bhi cgt ke against collect nahi hua"  :smilestar:
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on February 14, 2011, 11:42:00 AM
Key notes from the notification of CGT rules
Over the weekend, the Federal Board of Revenue (FBR) issued an SRO for the rules/modalities of the
Capital Gain Tax (CGT). Key highlights are as follows:

1. FIFO will be the accounting method used to calculate CGT.
2. Capital gain is applicable on purchase, exchange, bonus issue, rights issue, gifts, bequest,
inheritance, leverage schemes and derivatives contracts.
3. Off market transactions will also fall under the ambit of CGT.
4. CGT on short sales shall be for the period between the dates when the security was short and
when the security was purchased to cover the short position.
5. In case of futures contracts, holding period will be between the date of entry into a futures contract
and the date of exit from such contract.
6. Wash sales: Capital loss adjustment shall not be allowed if a specific security is repurchased
within one month period, thus maintaining the portfolio.
7. Cross trades: Capital loss adjustment shall not be allowed if traded between two related accounts
of the same investor, between two related accounts of the related investors, between two
membership cards of the same broker or between two related brokerage houses to artificially
realize capital losses in one account without actually selling the securities to an outsider.
8. Tax swap sales: Capital loss adjustment shall not be allowed if a security from the same sector
(related scrips) is bought to maintain the same risk return profile. We believe, similar to wash
sales, one month time period should be applicable on this as well.
9. Fortnightly ledger statements and CDC statements, record of security holding and cash carried as
of June 30th, and record of funds deposited and withdrawn should be maintained.
10. Investor will be required to obtain a tax clearance certificate before closing his/her account. If a
broker closes the account without the certificate, it shall be liable for the investor’s tax liability.

jsgcl
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on February 23, 2011, 07:16:54 PM
Stockbrokers yet to face real challenge under CGT regime
By Shahnawaz Akhter
Wednesday, February 23, 2011
KARACHI: Stockbrokers will have to provide tax officials their source of investment made during last five years when they file their
first income tax returns under the capital gains tax (CGT) regime this year, sources said on Tuesday.
“The capital gains tax is not in vogue for the last several years, therefore, they (stockbrokers) have so far remained exempted from
providing the source of investment,” a senior official said on the condition of anonymity.
“Now in June, the Federal Board of Revenue (FBR) would select cases for audit of Karachi Stock Exchange members and can
question their source of local investment made during five years,” the official added.

In the last budget, the government had reintroduced the capital gains tax on the sale of shares effective from July 1, 2010.
Some tax officials in the Regional Tax Office (RTO), Karachi have expressed concerns that some leading stockbrokers would escape
from this condition because the office had already audited those cases or selected for the audit in the current year to give clean-chit as
their cases would not be selected in the coming years.
Asrar Raouf, Additional Secretary Revenue Division, while clarifying the concerns said that the FBR may undertake audit on solid
information of concealment whether those had already been audited in the previous year.
“Under the law, the tax official can select a case and question the activity of the last five years on valuable information whether it had
been audited in the last year,” Raouf told The News.
Another senior official at the RTO Karachi said that the annual income tax return under the new regime would be filed for the first
time this year. Normally, the revenue body does not select those cases for audit, which have been already audited during the last year.
“But in this particular case some major cases would be audited,” the official said.
Sharing of information about the source of investment would help identify the black money involved in the capital market, the official
said.
The FBR had estimated that billions of rupees are involved in the trade, which has no proof of investors. “It will pave the way for
reaching those people who have not declared their money to the tax authorities,” the official added.
The official said that after filing of returns, including the details of the capital gains tax, the tax department would initiate preliminary
assessment of the declared amount.

“Later, cases where discrepancies will be detected would be taken for forensic audit,” the official said.
In the Budget 2010/11, the government had proposed 10 percent CGT on holding of shares below six months and 7.5 percent for
holding less than 12 months. However, exemption is granted on holding of shares for more than one year. The stock markets receive
two types of investments, local investment and portfolio investment.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on April 14, 2011, 10:18:16 AM
CGT returns
 Javed Mirza
Thursday, April 14, 2011
 KARACHI: The Federal Board of Revenue (FBR) has sought sensitive financial information, source of investment and details of trading in stocks from investors along with the capital gains tax (CGT) returns.

Last week, the revenue body issued a performa of a statement of capital gains tax liability. According to the statement, investors are required to provide their name, address, brokerage account number along with the date of account opening and CDC sub-account number. They also need to mention total value of shares carried in the account as of June 30, total cash carried in account as of June 30 each year, capital gain/loss during the period and the net tax liability arising as on the due date.

The capital gains tax statement also requires complete details of shares purchased and sold, their quantity, per share price and the total sale proceed.

There is a tax of 10 percent on purchase price of shares held up to six months and 7.5 percent on scrips held up to one year.

Investors are also required to provide complete details of shares purchased or sold held for over a year, in spite of their exemption from the capital gains tax.

A KSE member on the condition of anonymity said that paying tax is no issue, but the ‘documentation’ and ‘disclosure of sensitive financial information’ has perturbed the members, who actively invests in the share market.

Dealers said that the members and investors are reluctant to disclose such information for ‘obvious reasons’.

This is the reason why the tax department has received a nominal amount of advance tax on capital gains despite a lapse of two deadlines. The tax department had extended the deadline till January 11 for the payment of advance capital gains tax for the first and second quarters of the current fiscal year, but the response was quite disappointing, therefore, the deadline was again extended to March 25.

Analysts said that there are several ambiguities in the capital gains tax rules, besides 15 percent income tax surcharge, which was also applicable on the CGT. This has further dampened the stock members’ interest in filing advance CGT.

Furthermore, there has been no mock activity or training session in this regard and the tax managers are still unclear about the procedures of filing advance tax and tax returns.


 
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on May 04, 2011, 10:06:08 AM
KSE wants small investors spared
 Saad Hasan
Wednesday, May 04, 2011
 KARACHI: Pakistan’s largest stock exchange wants tax authorities to refrain from scrutinising the source of income of small investors, most of whom have stopped trading in shares, senior officials said on Tuesday.

Investors who have a portfolio of less than Rs1 million must be absolved from inquiries into their funds as part of measures to boost trading in the market, they said referring to the draft of KSE’s recommendations for 2011-12 budget.

“Volumes are at extraordinarily low levels,” an official said. “And one of the reasons for this is the low participation level of retail investors who are wary of a new tax, which also involves documentation and bookkeeping.”

The government last year introduced a Capital Gains Tax (CGT) on share trading. This tax varies between 10 percent and 7.5 percent depending on the period for which shares are held.

But for retail investors, most of whom run small businesses, keeping a simple ledger could be a big headache, said the KSE official. “Someone who trades in say just 1000 or 1200 shares finds the cost of filing tax returns too high.”

The Board of Directors of the KSE has prepared the proposals. Facilitation of investors has come up as one of the points in their recommendations.

Even some of the brokers do not understand the process of filing tax returns, sources said.

Daily volume at the KSE has dropped to just 76 million shares against volumes of over 1 billion seen three years back. The economic slowdown, deteriorating security situation and high inflation have already made trading in the stocks a risky venture.

The electronic forms for paying CGT do not specifically require information about the source of funds invested in stocks, but there is fear that tax officials will start sweeping the record once the returns are filed, the KSE official said.

“We also want a provision for carrying forward the loss from one trading year into the next,” he said.

“The law does provide for netting losses against gains. But what if someone incurs only losses in a particular year? Investors should be allowed to compensate that loss.”

There is also a proposal to give tax incentive to listed companies in a bid to encourage initial public offerings (IPO) and increase the depth of the market, he said.

Leverage trading, which means buying shares from borrowed money, has hit rock bottom these days because of increasing risk perception, analysts say.

“When discount rate is 14 percent and inflation is hovering around 16 percent, KSE should be offering at least returns of over 25 percent to make stock trading feasible. Well, that does not seem to be happening.”

The demutualisation process of KSE whereby the ownership of the market will move from brokers to public was also discussed a few days back by the board, officials said.

“Demutualisation law has been passed by the National Assembly, but the Senate was not able to take it up and I think it has lapsed,” another official said.

“We have asked the FBR to give brokers a one-time waiver on capital gains made from selling their stake in KSE.”

Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on May 18, 2011, 11:29:12 AM
KSE daily trade declines by 43 percent in fiscal year 2011: CGT, documentation fear blamed for plummet
RECORDER REPORT
KARACHI  (May 18, 2011) : The imposition of capital gains tax (CGT) on share trading and fear of documentation has forced the investors to leave the market and daily trade at Pakistan premier stock exchange has drastically declined by 43 per cent in FY11 as compared to FY10, analysts said. The share of individual investors has come down to 44 per cent from over 54 per cent before the imposition of CGT, they added.

"As a consequence of record low volumes many companies are deferring their plan to raise capital from the equity market evident by only one IPO in FY11 at the local bourse", Muhammad Sohail, leading analyst and CEO of Topline Securities said. "Pakistan's once vibrant and actively traded Karachi bourse that used to trade Rs 40 billion a day in cash and single stock futures Rs 12 billion on an average is on the verge of loosing its once famous slogan of most liquid market of Asia," he added.

He said that the Rs 40 billion a day was 'average' of four years during 2005 and 2008. This period also saw an all time high volume of Rs 216 billion a day ($3.7 billion) on March 9, 2005. And the ground reality is that if recent trend of volumes continue it will take six months for brokers, exchanges, investors etc to see these volumes to surpass the record volume seen on one day on March 9, 2005. That is the revenue earned by the exchanges, brokers, government; etc on that particular day is now equal to revenue earned in six months, he added.

Interestingly, he said, the volume at Karachi market these days are as low as what investors used to trade when there was a three and a half month price floor in 2008. Though price discovery was an issue at the end of 2008 when regulators placed an infamous market floor, volumes in the off market were close to what it is now. That shows the depressing state through which local bourses are passing these days. In last three days average traded value at KSE was Rs 1.7 billion (in cash, off and derivatives market) compared to average volume of approximately Rs one billion at the time when market was practically closed down in September-November 2008 period.

He was of the view that the CGT is one of the main reasons for low volumes at the local bourse. In FY11 which is coming to an end, the average volumes are Rs 4.0 billion in cash and Rs 0.5 billion in the futures market down 43 per cent against FY10. "The main reason for this lacklustre activity is the imposition of CGT in July FY 11 after a gap of more than three decades," he said. Besides the fear of documentation, the complex computation method to arrive at the actual gain or loss is the major reason that has forced individual investors to leave the market, he added. "This can be verified from the fact that individual share in total trading has come to average 44 per cent from around 54 per cent before the imposition of CGT," he said.

"In terms of turnover velocity (volume divided by market cap) which is a better and relative measure of market depth, Pakistan's turnover velocity last month was 22 percent as compared to an average of Asian markets of more than 100 percent", he said. Pakistan's turnover velocity in 2003 was at record 490 per cent as compared to Asian average of 80 per cent making it one of the most actively traded markets at that time. These plummeting activities at capital markets have serious implications for capital formation and government's objective to raise long term funds through the capital markets, he added.


Title: Re: CGT -- Capital Gains Tax
Post by: M&M on May 21, 2011, 01:15:43 PM
Hasnain Asghar Ali at Aziz Fidahusein Co said that budget leaks on likely change in capital gain tax (CGT) implementation mode led to low volume recovery by the index. In an otherwise dull session, renewed buying in dividend-yielding stocks and speculative activity in various high priced stocks after initial setback disallowed red numbers prominent in various front line expensive stocks facing various threats to dominate the benchmark.

He said that budget leaks suggesting high chances of acceptance of proposals to change the implementation mode of CGT by officials did allow mainly the local participants to arrest low volume decline during early trade, thus disallowing panic to set in, despite low and sinking volumes. He said that the likely change proposed in CGT collection would result in increase in revenues from equity market activities besides providing the equity market desired depth, with financing through Margin Trading System (MTS) available at cheaper rates. The likely changes in collection mode of CGT would certainly allow the leverage participants to trade at improved capacity, despite a gloomy economic, financial and geo-political horizon.

Extraction (http://www.brecorder.com/top-stories/single/595/0/1190251/)
Title: Re: CGT -- Capital Gains Tax
Post by: M&M on May 25, 2011, 11:38:08 AM
Govt to review Capital Gains Tax on stocks
By Dilawar Hussain | From the Newspaper
(10 hours ago) Today

KARACHI, May 24: The meeting between the Ministry of Finance, headed by Federal Finance Minister Abdul Hafeez Sheikh and the Pakistan Business Council (PBC) in Islamabad on Monday and Tuesday focused on several matters of interest and concern to the business community.

The Capital Gains Tax on stocks–mainly the methodology of its collection came under consideration and also issues relating to the turnaround and privatisation of state-owned enterprises (SOEs).

A third round of the marathon consultations would be held in the next few days.

Sitting on the PBC side of the table were also the chairman KSE Munir Kamal and market expert/ broker Arif Habib and Aqeel Karim Dhedhi.

Earlier on Monday, the delegation had met the President, Asif Ali Zardari.

From the stock exchange point of view, the burning issue was the CGT, which the business/brokers pointed out was unable to generate required revenue for the government, but was the principal factor in depleting volumes at the market.

A member present at the meeting said that it was emphasised that the method of collecting CGT had raised concerns among small investors.

Instead of the CGT, the revival of withholding tax at 0.02 per cent on trading was recommended to the government.

In the earlier meeting with the President on Monday, a member said that the President had directed the Finance Ministry to review the matter.

Other than that, the government was anxious to revitalise the ailing public sector units. The ministry proposed to hand over management control of such sick state-owned enterprises (SOEs) to a consortium of private parties, which could push to turnaround and wipe the red off their balance sheets. The units could then be offered for privatisation. In respect of SOEs—both sick and healthy—four proposals were laid on the table for discussion: One to hand over the management through contracts; two to privatise (units like SLIC etc); three to list on the stock exchanges and four to divest more of government-held equity in blue chip companies, such as PPL, OGDC and others.

It was agreed that subsidies provided to worthless units should be withdrawn.

The KSE side also asked for 15 per cent tax rebate for five years to new companies that enter the capital market for listing and a cut in tax rate for listed companies that distribute 50 per cent or more of their yearly profit in dividends to shareholders.

Source:
heehaww (http://www.dawn.com/2011/05/25/govt-to-review-capital-gains-tax-on-stocks.html)
Title: Re: CGT -- Capital Gains Tax
Post by: Tezihunt on May 25, 2011, 02:48:41 PM
Thanks M&M you are giving good updates....
Title: Re: CGT -- Capital Gains Tax
Post by: JAWAD on May 25, 2011, 11:22:20 PM
how would market react to removal of cgt .... ?
Title: Re: CGT -- Capital Gains Tax
Post by: Salman Akbar on May 25, 2011, 11:49:40 PM
how would market react to removal of cgt .... ?

didn't you see the market reaction in the past two days?
Title: Re: CGT -- Capital Gains Tax
Post by: JAWAD on May 26, 2011, 11:14:17 PM
salman bhai i have but m talking about index target ....?
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on May 30, 2011, 08:59:47 PM

Stalled capital gains tax
www.dawn.com/2011/05/30/stalled-capital-gains-tax.html
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 04, 2011, 10:18:10 AM
Budget fails to address stock market concerns over CGT
 Saad Hasan
 Saturday, June 04, 2011
KARACHI: The government’s decision to keep the tax regime for the stock markets unchanged dashed all hopes of a recovery in their trade volumes, brokers and officials said on Friday.

The expectations of an exemption of individual investors from the capital gain tax (CGT) added 251 points to the benchmark Karachi Stock Exchange (KSE)-100 Index in the past week alone, they said.

But the government’s decision to keep CGT unchanged will now push investors toward other investment avenues such as real estate, said Mohammad Yaseen Lakhani, a former KSE director.

“The market will plunge further and this is bad for the cash-strapped government, planning to sell shares of public sector enterprises.”

The Karachi Stock Exchange management, optimistic about the approval of its proposals by the Finance Ministry, released their specific details to the media just hours before the budget announcement.

“Individual investors should be exempted from CGT,” said Nadeem Naqvi, managing director of KSE. “They don’t want to get involved with tax officials.”

Naqvi said that he wanted to see the complete budget document before accepting that the government ignored all the proposals.

Average daily trading volume has plunged to around 115 million shares at the KSE in the current fiscal against 173 million a year ago, making survival of some of the brokerage houses difficult.

Many brokerage companies closed offices and fired workers owing to falling revenues, officials said.

Mohammad Sohail, a KSE board member and CEO of Topline Securities, feared that the market will plunge by 200 points in the coming sessions. “Volumes will continue to remain low.

The government should forget its dream of privatisation now.” Low daily turnover has made price discovery of shares difficult, discouraging companies from listing their shares, he said.

Participation of retail investors has dropped since CGT was imposed last year. Market players say that retail investors stay away from trading due to the complex tax return filing procedures.

The CGT, which was imposed at 7.5 percent to 10 percent, came as a consequence of public pressure to tax the brokers.

Federal budget did offer some breather to the stock market in the shape of concessions to some industries.

The government has increased tax rebate to 15 percent from 5 percent for the companies that list shares at the stock market, analysts said.

Companies making complete equity investment to buy plant and machinery and build factories have been exempted from tax until they start making revenues from such investment, they said.

Cement companies will benefit from reduction in federal excise duty announced in the budget.

Analysts said these measures are likely to boost trading in these sectors.



Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 04, 2011, 10:18:59 AM
Next to nothing for stock market

 By Dilawar Hussain | From the Newspaper
 (9 hours ago) Today
KARACHI, June 3: Except for the Finance Minister’s perseverance to keep reading his budget speech in the face of a deafening cacophonous hullabaloo and the Rs200 per ton cut in Federal Excise Duty on cement, most brokers and analysts said they had scarcely a reason to smile.

On the face of it, the budget seemed to offer next to nothing for investors in stocks.

The capital market experts were at a loss to say if the budget had solved one major riddle regarding stock investment: The exemption of Capital Gains Tax (CGT) for small investors/individuals. The confusion was so profound that even the KSE directors were not sure if the CGT on individuals had been waived or was still intact.

Two directors consulted late in the evening held opposite views; both, however, asked not to be named. But as stock brokers feverishly downloaded and scrolled down the budget document to ponder over section 37A of the Income Tax Ordinance, 2001, their jaws dropped.

“The section 37A of the Ordinance lists the CGT rate on stocks,” said one, adding, “It is the same as last year.”

A broker shrilled that it was a breach of the promise made by the Finance Minister to a team of senior brokers, who had met him the previous month in Islamabad.

An optimist, however, thought that an amendment may yet be made, after the budget discussion  in the parliament.

Analysts, such as Faisal Shaji, head of online equity at Standard Capital Securities, termed it a “healthy budget.”

Federal Excise Duty on cement had been slashed by Rs200, from Rs700 to Rs500, with the express intention to write all of it off in next two years. Faisal said the allocation of higher amount for Public Sector Development Programme would give impetus to the cement demand and enable full utilisation of capacity.

Some analysts who went along with the Standard Capital analysis, said that the reduction of General Sales Tax–inflationary in its impact– from 17 to 16 per cent, would help rein inflation. Analysts at professional firms and brokerages, always in a race to be the first to come up with budgetary comments, fished out some other budgetary measures.

One said that the document included a proposal to offer incentive of tax exemption for five years to existing or new companies that invest in plant & machinery.

Aside from the great expectations regarding the CGT, the market had almost held a consensus view over increase of tax rate for banks from 35 to 40, due to their reluctance in cutting down the spread. That however was not to be and offered some cheers to investors in the sector and bankers.
Title: Re: CGT -- Capital Gains Tax
Post by: Dr. Economist on June 04, 2011, 11:26:40 AM
I think so the picture will be more clear in coming days.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 04, 2011, 11:34:32 AM
I think so the picture will be more clear in coming days.

picture is clear cgt stays
Title: Re: CGT -- Capital Gains Tax
Post by: Salman Akbar on June 04, 2011, 01:06:48 PM
I think so the picture will be more clear in coming days.

picture is clear cgt stays

CGT stays the enthusiasm dies.

now its time to keep looking at the technicals and trade accordingly
Title: Re: CGT -- Capital Gains Tax
Post by: Tezihunt on June 04, 2011, 01:43:13 PM
@ Farzooq

Thanks for your updates on budget and CGT... :fingerscrossed1:
Title: Re: CGT -- Capital Gains Tax
Post by: bmatiger on June 05, 2011, 12:50:49 AM
Karachi Stock Exchange director hails budget

KARACHI: Director Karachi Stock Exchange (KSE) Zafar Moti Friday lauded the budget 2011-2012 and said it would have a positive impact on the country’s stock market. He said the government has agreed to the proposal of stock market to exempt individual and small investors from capital gain tax (CGT). He said this decision would encourage investors and help in boosting the trading volume in the capital market. These volumes have dropped to historically low levels in the last one and a half year, he added. He said the Finance Minister did not make specific announcement regarding CGT, but it was agreed with KSE that individual and small investors would continue to pay 0.02 percent withholding tax as a final tax liability. This will be announced in the Finance Bill 2011-12, he added. Commenting on the withdrawal of special duties and Federal Excise Duty on large number of items, Moti said it would boost local production of these items in the country and discourage their smuggling. Managing Director KSE Nadeem Naqvi said national budget 2011-12 would activity in the stock market and encourage initial public offerings (IPOs). Naqvi said KSE has roposed to exempt retail and small investors from capital gain tax as he tax payers do no want any interaction with tax collectors. He said simplification of tax collection would increase revenue for the country and boost the confidence of taxpayers. He said the government wanted to trigger growth in the economy and the cut in duties would have an impact on local production of goods and stock market would have so many IPOs. app
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 05, 2011, 10:31:06 AM
Karachi bourse to rebound after initial dip
 Saad Hasan
 Sunday, June 05, 2011

KARACHI: The Karachi Stock Exchange (KSE) will see an initial dip this week before rising again as investors pull themselves together after the disappointment over budget and realised that the shares still trade at attractive levels, traders said.

The benchmark KSE-100 could slide by 200 points in the first few sessions because of the negative sentiment, following government’s decision to bulldoze market expectations of tax concessions for the shares trade, they said.

“The federal budget won’t have any negative impact on shares price or index level,” said Hamad Aslam, head of equities at BMA Capital. “But if anyone should really be worried that would be us, the brokerage employees. It is my job that is at stake now.”

For the last few weeks, rumours had gripped the market about possible exemption of small investors from the capital gains tax (CGT), which is seen by many as the main cause of pulling down volumes, analysts said.

The index increased in recent sessions on the back of the rumours, as well and analysts expect a correction that the government has not made changes in the way CGT is collected.

“It is for sure that there will not be any market crash,” said Aslam. “Especially, when speculation is limited in the market and institutional investors along with foreign funds have become index movers.”

The KSE-100 Index gained 11.14 points during the last week to close at 12,236.66 points. This was in addition to an increase of 251 points during the week that ended on May 27.

Trading remained centered on the news regarding the CGT and budget. Energy shares were active in the midweek as international crude oil price shot up and the government deregulated prices of some petroleum products.

Arif Habib Investments Director Ahsan Mehanti said that some measures taken in the budget will prove to be beneficial for the market.

“The government did not take some of the dreadful steps such as hike in corporate tax rate, additional tax on banks and reduction in subsidies.”

The subsidy will also continue for the fertiliser sector against the news of its withdrawal, he said. “I am hoping that the market will end positively this week.”

However, he said that the CGT will continue to keep investors on the sidelines, something which is not good for trading volumes.

“The government also needs market to perform for it to privatise.

It is time to subsidise stock market rather than making the budget a non-event.”

Oil refineries could witness a price rally because the government has not touched the controversial subject of deemed duty, which has become major contributor to their earnings, cement, fertiliser and banking shares could also do well, the analysts said.

Qasim Ali Shah, head of equities at Global Securities, said that the market will remain dull till late in July when companies start to announce their annual earnings. “Other than that I see no other trigger.”

Stock brokers could push the government to rethink its decisions on the CGT as the budget comes under discussion in the parliament, he added.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 17, 2011, 03:33:52 PM
(http://www.kse.com.pk/newsimage/025701-1.gif)
Title: Re: CGT -- Capital Gains Tax
Post by: ihashishin on June 20, 2011, 09:40:28 AM
for individuals we dont need to file our cgt on a quarterly basis do we?

also has anyone tried calculating their cgt yet? how much time did it require (hours)?
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 20, 2011, 10:07:22 AM
for individuals we dont need to file our cgt on a quarterly basis do we?

also has anyone tried calculating their cgt yet? how much time did it require (hours)?

its annually for individuals
i guess it will be brokers who would calculate cgt for us  :skeptic:
Title: Re: CGT -- Capital Gains Tax
Post by: Abdul Qadir on June 20, 2011, 02:00:53 PM
http://e.fbr.gov.pk//SOP/CGT_UserGuide.pdf

Very rigid process of submitting tax returns and will effect the future of stock market to greater extent.
Title: Re: CGT -- Capital Gains Tax
Post by: ihashishin on June 22, 2011, 02:19:16 PM
for individuals we dont need to file our cgt on a quarterly basis do we?

also has anyone tried calculating their cgt yet? how much time did it require (hours)?

its annually for individuals
i guess it will be brokers who would calculate cgt for us  :skeptic:

i really hope that the brokers do do it  :fingerscrossed1:

because i looked at the form that is posted by qadir (thanks) and that looks like a tedious method where you have to submit each completed trade separately and i have something like 500+ transactions for the year :crying_anim02: aisa lag raha hai kay aik sal key trading kay liya aik sal submission may lag jai gaa
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 22, 2011, 02:31:05 PM
for individuals we dont need to file our cgt on a quarterly basis do we?

also has anyone tried calculating their cgt yet? how much time did it require (hours)?

its annually for individuals
i guess it will be brokers who would calculate cgt for us  :skeptic:

i really hope that the brokers do do it  :fingerscrossed1:

because i looked at the form that is posted by qadir (thanks) and that looks like a tedious method where you have to submit each completed trade separately and i have something like 500+ transactions for the year :crying_anim02: aisa lag raha hai kay aik sal key trading kay liya aik sal submission may lag jai gaa

yes that is impossible
Title: Re: CGT -- Capital Gains Tax
Post by: TeleData on June 22, 2011, 03:33:14 PM
If I have a Account in Broker then Broker submit the CGT or ME
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 22, 2011, 03:44:12 PM
If I have a Account in Broker then Broker submit the CGT or ME

you will
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on July 29, 2011, 10:50:01 AM
‘SECP supports changing tax procedure for shares’
 Saad Hasan
 Friday, July 29, 2011
KARACHI: The Securities and Exchange Commission of Pakistan (SECP) supports change in the mode of taxing the trade in the shares in a bid to encourage the investors back in to the capital markets, the top boss of the apex regulator said on Thursday.

“We think now is not the time for Capital Gains Tax (CGT),” said Chairman SECP Muhammad Ali, talking to journalists. “Eventually, CGT is the way forward but we should wait three or four years for that.”

SECP believes that instead of asking individual investors to file returns, as required under the CGT regime, authorities should levy withholding tax, which the brokerage firms deduct on the transactions of shares, he said.

Since CGT was imposed two years back, average daily volumes have plunged to a 13-year low to 95 million shares, down 41 percent year-on-year in fiscal 2010/11. Average value of trades also declined to a 9-year low of Rs3.8 billion.

Investors fear that CGT filing procedure expose them to audit of tax authorities, which have the obligation to check source of the money being invested in the stocks.

Ali said that CGT must be imposed on different class of assets. “Otherwise, investors will simply switch from stocks to real estate. That is exactly what is happening.”

Federal Board of Revenue (FBR) is reviewing the amount of tax collected so far through CGT, he said. “We are in talks with them. Let’s see what happens.”

The 7 to 10 percent CGT came as a consequence of public pressure. But since its imposition, the government revenue from the stock market has actually dropped.

Luring back retail investors to capital markets has become difficult, as thousands have lost their entire savings in the 2008 market crash, Ali said. “There is need to attract them and new investors. Many measures are needed for that, starting from education of people.”

There are approximately 200,000 stock investors in Pakistan and most of them are not active traders, placing the country below a lot of developing economies in terms of public interest in stock market.

About increasing depth of capital markets, Ali said that financial incentives encourage companies to raise debt through stock exchange.

“Unfortunately, there are no tax incentives for listed firms, which find it more luring to take bank loans and deduct interest expense from tax.” The SECP also wants to relax terms of financing under the Margin Trading System (MTS), which is used to borrow money for trading but Ministry of Finance has final say in the matter.

MTS suffers from strict requirement of depositing 25 percent cash margin for taking leverage in shares’ trade. “SECP is considering if the arrangement could be partly cash and partly eligible securities,” Ali said.

Since MTS’s launch, less than Rs200 million have been borrowed on daily basis. The previous Continuous Funding System financed an average of Rs40 billion.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on September 17, 2011, 11:54:59 AM
Filling returns anyone ???
Title: Re: CGT -- Capital Gains Tax
Post by: M&M on September 17, 2011, 12:04:07 PM
Filling returns anyone ???
naah
Title: Re: CGT -- Capital Gains Tax
Post by: fasee on September 17, 2011, 12:49:12 PM
i tried a couple of times ( even today ) it was not showing on the online portal ...then digged out teh SROs

as when i logged in , it was stil showing tax year 2010 as the latest

i guess the tax year 2011 form is still under approval process..and date has been exteded till 30th october for individuals..

http://n.fbr.gov.pk/Docs/2011916159419873sroCancellation.pdf (http://"http://n.fbr.gov.pk/Docs/2011916159419873sroCancellation.pdf")

http://n.fbr.gov.pk/Docs/20118261183023851...cular10.pdf.pdf (http://"http://n.fbr.gov.pk/Docs/201182611830238512011circular10.pdf.pdf")
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on September 17, 2011, 12:55:57 PM
i tried a couple of times ( even today ) it was not showing on the online portal ...then digged out teh SROs

as when i logged in , it was stil showing tax year 2010 as the latest

i guess the tax year 2011 form is still under approval process..and date has been exteded till 30th october for individuals..

http://n.fbr.gov.pk/Docs/2011916159419873sroCancellation.pdf (http://"http://n.fbr.gov.pk/Docs/2011916159419873sroCancellation.pdf")

http://n.fbr.gov.pk/Docs/20118261183023851...cular10.pdf.pdf (http://"http://n.fbr.gov.pk/Docs/201182611830238512011circular10.pdf.pdf")

 :thanks:
Title: Re: CGT -- Capital Gains Tax
Post by: fasee on September 17, 2011, 01:01:50 PM
no probz.

actualy i was worried myself since only 13 days left to file it...and still they havent uplaoded the excell sheet with formulas to do my homework on
Title: Re: CGT -- Capital Gains Tax
Post by: Farooq Qadir on September 19, 2011, 12:45:39 PM
Filing date has been extended uptil 31 Oct 2011 .
Title: Re: CGT -- Capital Gains Tax
Post by: Poker Face on September 19, 2011, 04:55:42 PM
no probz.

actualy i was worried myself since only 13 days left to file it...and still they havent uplaoded the excell sheet with formulas to do my homework on
Why were you worried?
I don't think if a single person has paid CGT till now?
Title: Re: CGT -- Capital Gains Tax
Post by: fasee on September 19, 2011, 05:23:14 PM
aray nahe sir jee, there are so many people who are paying CGT ( including myself ) since last so many months....and i do file a return since maybe 6-7 years or so....so CGT was just one piece of the whole picture ::)

magar ab sakoon hai, i have ample time to collect data n docuemnts ke kis kis ke haath pe apna lahoo talash karoon ( yaani,to see who has deducted how much tax from my revenues ) :arrowhead:
no probz.

actualy i was worried myself since only 13 days left to file it...and still they havent uplaoded the excell sheet with formulas to do my homework on
Why were you worried?
I don't think if a single person has paid CGT till now?
Title: Re: CGT -- Capital Gains Tax
Post by: ihashishin on October 07, 2011, 12:40:39 PM
HELP!
has anyone come up with a format/excel sheet formula to calculate it cgt?

i have basically put all my trades in a spreadsheet with each script in a tab and in the tab i can only figure out how to calculate the capital gain when and if i zero out a position :brickwall:  -  making it calculate the days and rate based on days is beyond my capability in excel  :(

also does anyone know about the rules with which to go by, last i heard was that the rules still have not been finalised....

comments?
what are you doing about your capital gains? submitting, not submitting, using creative accounting?

Title: Re: CGT -- Capital Gains Tax
Post by: TeleData on October 07, 2011, 10:53:13 PM
Assalam-o-Alaikum

CGT ki koi khabbar ha ?

Kiya kesi Bhai na jama karwa ha ?
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on October 08, 2011, 09:54:34 AM


Capital gains tax did not yield desired result: Chairman SECP

STAFF REPORT Thursday, 6 Oct 2011 4:37 am | Comments (0)

•Tax led to a reduction in trading volumes g Corporate taxes should be reduced

 LAHORE - Chairman SECP, Muhammad Ali has suggested the possibility of setting up a separate exchange for small and medium enterprises or setting up a separate trading board for such companies.
 He floated this prospect at the first IPO summit held in Lahore. Addressing the first Pakistan IPO Summit “Creating Tomorrows Blue Chips Companies”. He opined that several organisations were reluctant to list their companies on the stock exchange due to the discrepancy in the tax code. He reiterated this fact by stating that the high corporate tax rate of 35 per cent is a deterrent for many companies, as private companies enjoy a much lower tax of 25 per cent. He proposed the reduction of corporate tax rate to 25 per cent to make corporate markets more competitive.

 Lamenting the imposition of capital gains tax by government as a tool to provide cushion to its depleting revenue, the imposition of Capital gains tax resulted in precipitous reduction in trading volume. He stressed the need to review the capital gains tax.
 Furthermore, he stressed the need of demutualisation of the stock exchanges, as it would help mitigate investors’ and brokers’ problems. He attributed the exponential growth of public companies vis-à-vis private companies due to access to more capital at lower rates.
 The event was held under the auspices of SAFE in collaboration with LSE and SECP as its lead patron. Business Recorder was the media partner for the event.

 The Summit was spread over various panel discussions and presentations by the gurus of the financial markets. The IPO summit was attended by all the big conglomerates of Pakistan including Engro Corporation, Nishat Group, Arif Habib Securities, IGI Securities. Some of the prominent presentations included benefits of listing a company, Corporate Governance & post listing compliance, Debt Market Instruments for Capital Markets, and challenges of public listing for family owned businesses. The participants hoped that such summits would be held regularly and would be instrumental in removing any distorted perceptions about the capital markets in Pakistan.

 Addressing the Event, MD LSE and Secretary General SAFE Aftab Ahmed Chaudhry enumerated the benefits of listing a company. He illustrated how companies can tap into monumental amount of wealth by going public. He provided example of recent Glencore International IPO that created 9 billionaires. Furthermore, he attributed the capital markets as an engine of wealth creation for shareholders who have historically received higher earnings as compared to bank returns.

 Addressing the auspicious occasion, Ms Ayla Majid, Director ISE, explained the role of corporate governance in aiding to maintain better relationship with all constituents a business can have: shareholders, lenders, consumers, suppliers and regulators. The participants expressed their optimism that such events could serve as springboard for removing any distorted and warped perceptions about the Capital Markets in Pakistan by the enterprises as well as investors. Souvenirs and mementos were also distributed by Chairman LSE Aftab Ahmad Khan to commemorate the
momentous occasion.
Title: Re: CGT -- Capital Gains Tax
Post by: Trademaster on October 09, 2011, 03:01:33 PM
Hope DR cut rally ke bad is ki bhi koi god news aajae to market 14000 tak ja sakti hai.
Title: Re: CGT -- Capital Gains Tax
Post by: TeleData on October 10, 2011, 10:57:38 PM
Assalam-o-Alaikum

Farzooq Bhai

Kiya Aap CGT ki return File kara rahay ha !
Title: Re: CGT -- Capital Gains Tax
Post by: 007 on October 10, 2011, 11:00:51 PM
Yahan logo income tax return file nahin kartay cgt Ka Allah hafiz hai

Ps I have not done so
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on October 11, 2011, 12:04:08 AM
Assalam-o-Alaikum

Farzooq Bhai

Kiya Aap CGT ki return File kara rahay ha !

return yes
Cgt no
Title: Re: CGT -- Capital Gains Tax
Post by: M&M on October 20, 2011, 11:18:04 AM
CGT UserGuide (http://e.fbr.gov.pk/SOP/CGT_UserGuide.pdf)
Title: Re: CGT -- Capital Gains Tax
Post by: zahidsharif151 on October 26, 2011, 12:45:16 PM
CGT UserGuide (http://e.fbr.gov.pk/SOP/CGT_UserGuide.pdf)

do we submit return or not, senior advice please
Title: Re: CGT -- Capital Gains Tax
Post by: M&M on October 26, 2011, 06:44:09 PM
CGT UserGuide (http://e.fbr.gov.pk/SOP/CGT_UserGuide.pdf)

do we submit return or not, senior advice please
zara apney broker se poocho wo kia kehta hey.
the thing is
1. If you don't pay CGT, your broker will be responsible
2. You need to get 'tax clearance certificate' before closing your account

unless you are in the market for short time, you need not worry about anything rather it's your broker who shud be worried and stay in touch with you.
online banking paindabad
Pakistan zindabad
Title: Re: CGT -- Capital Gains Tax
Post by: Farooq Qadir on October 27, 2011, 09:22:24 AM
return Filing date has been extended uptil 20th Nov 2011
Title: Re: CGT -- Capital Gains Tax
Post by: Farooq Qadir on November 17, 2011, 03:42:42 PM
acual date is 21st not 20th. Presently all tax payers need to submit their returns via e-statment through FBR website. therefore u can file on sunday. i don't think it will further extended.
Title: Re: CGT -- Capital Gains Tax
Post by: TeleData on November 22, 2011, 01:37:40 PM
return Filing date has been extended uptil 30th Nov 2011
Title: Re: CGT -- Capital Gains Tax
Post by: imran.hafeez on November 23, 2011, 10:00:39 PM
I am planning to file CGT return.

I feel 10,000 kee small see universe ha jo actively trade kartee ha KSE meh, and these FBR ppl will send notices to everyone of us if we will not file the return.

If we will not reply, provisional assesments send kar kay humain defaulter na declare kar dain

Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on December 08, 2011, 09:32:57 AM



SECP, KSE agree to relax capital gains tax collection rules
 Salman Siddiqui
 Thursday, December 08, 2011

 
KARACHI: The Securities and Exchange Commission of Pakistan (SECP) has extended its support to the Karachi Stock Exchange (KSE) for relaxing the rules for Capital Gains Tax (CGT) collection, a KSE member said at the end of a meeting held between SECP and KSE on Wednesday.

The meeting attended by more than 100 members of the bourse lasted for about three hours, he said requesting not to be named. SECP Chairman Muhammad Ali, senior members of the KSE Arif Habib and Akeel Karim Dehdhi and few other brokers will visit Islamabad next week to convince the concerned officials that they should change the method of collecting CGT from the shares markets, he said.

KSE members have developed a consensus that the tax should be collected under the Presumptive Tax Regime (PTR) instead of on sale of shares. “The collection of such tax under PTR, instead of on the sale of shares, does not demand the disclosure of the source of income,” he explained.

Earlier, members of the KSE told the SECP chairman that the trade volume of KSE has dropped with the implementation of CGT.

The two sides, SECP and KSE, developed a consensus that the capital adequacy requirement for stock clearing member and traders may differ. “The capital adequacy requirement should be enhanced for clearing members and keep lower for traders,” he said.

Traders may be facilitated by the clearing members in case their trade turnover exceeds beyond the allowed level, he said.

He added that idea was at an initial stage, as the enhancement of capital adequacy requirement to Rs400 million was proposed in a SECP concept paper.

The SECP chairman was, however, quoted as saying that they should define a timeline for enhancing capital adequacy requirement for brokers.He was quoted as saying that it was not must to raise such requirement to Rs400 million, but it could be anything. The aim of enhancing capital adequacy requirement by SECP was to protect brokers’ clients in case brokers were declared bankrupt or default, the participant of the meeting said.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on December 10, 2011, 10:41:26 AM

Persons deriving taxable capital gain: brokers should ensure advance tax payment: FBR

 December 10, 2011
RECORDER REPORT
The Federal Board of Revenue has observed that brokerage houses and brokers of the stock exchanges have not been given any responsibility to ensure payment of advance tax on quarterly basis by persons deriving taxable capital gain as per provisions of the sub-section (5B) of section 147 of the Income Tax Ordinance 2001.


Sources told Business Recorder here on Friday that most of the individual investors have not filed their income tax returns for the Tax Year 2011 and paid negligible amount of tax under Income Tax Ordinance 2001.

These individual persons are also not paying the advance tax under sub-section (5B) of section 147 of the Income Tax Ordinance 2001.

There is a need to amend the section 37A of the Income Tax Ordinance 2001 for holding stock exchanges and brokerage houses responsible to withhold tax from any amount of capital gain arising from sale of securities held for the periods as mentioned in the concerned provisions of the Income Tax Ordinance 2001.

Explaining the taxability of capital gains on disposal of securities under section 37A and section 147 of the Income Tax Ordinance 2001, sources said that the capital gain arising from sales of securities such as share of a public limited company, voucher of PTC, Modaraba certificates etc was subjected to tax by insertion of Section 37-A in the Income Tax Ordinance 2001 vide Finance Act 2010.

However, the tax was not levied on security which was held for the period of more than one year.

According to sources, the capital gain u/s 37-A of the Income Tax Ordinance 2001 is treated as a separate block of income.

The loss on disposal of securities in a tax year is adjustable against again from any other securities chargeable to tax u/s 37-A, but the loss was not to be carried forward to the subsequent tax year.

For Tax Year 2011, where the security is held for less than six months, the rate of tax is 10 percent where the security is held for more than six months and less than one year, the rate of tax is 7.5 percent for Tax Year 2011.

As per provision of sub-section (5B) of Section 147 of the Income Tax Ordinance 2001, a person deriving taxable capital gain is required to pay advance tax @ 2% of the capital gain on quarterly basis where the security is held for less than 6 months and 1.5% of the capital gain on quarterly basis where the security is held for more than 6 months but less than 12 months.

However, there is no responsibility of the brokerage house or of the stock exchange in this respect.

This is the main lacuna in the provisions of Section 37-A because the market share of the individual persons in the stock market is more than 57% but are not paying advance tax u/s.147(B) of the Income Tax Ordinance and also most of them have not filed returns for the Tax Year 2011, sources explained.

Sources further said that the negligible tax has been paid on this score.

The tax department has sought information from the Karachi Stock Exchange (KSE) regarding capital gain earners during the period July 1, 2010 to 2011 to be submitted to FBR for circulation among field formations for necessary action.

There is an urgent need to change the provisions of law as contained in Section 37A and hold responsible stock exchange / brokerage houses to withhold tax from any amount of capital gain arising from sale of securities held for the periods as mentioned above, sources added.
Title: Re: CGT -- Capital Gains Tax
Post by: aliraza on December 10, 2011, 12:20:45 PM

Persons deriving taxable capital gain: brokers should ensure advance tax payment: FBR

 December 10, 2011
RECORDER REPORT
The Federal Board of Revenue has observed that brokerage houses and brokers of the stock exchanges have not been given any responsibility to ensure payment of advance tax on quarterly basis by persons deriving taxable capital gain as per provisions of the sub-section (5B) of section 147 of the Income Tax Ordinance 2001.


Sources told Business Recorder here on Friday that most of the individual investors have not filed their income tax returns for the Tax Year 2011 and paid negligible amount of tax under Income Tax Ordinance 2001.

These individual persons are also not paying the advance tax under sub-section (5B) of section 147 of the Income Tax Ordinance 2001.

There is a need to amend the section 37A of the Income Tax Ordinance 2001 for holding stock exchanges and brokerage houses responsible to withhold tax from any amount of capital gain arising from sale of securities held for the periods as mentioned in the concerned provisions of the Income Tax Ordinance 2001.

Explaining the taxability of capital gains on disposal of securities under section 37A and section 147 of the Income Tax Ordinance 2001, sources said that the capital gain arising from sales of securities such as share of a public limited company, voucher of PTC, Modaraba certificates etc was subjected to tax by insertion of Section 37-A in the Income Tax Ordinance 2001 vide Finance Act 2010.

However, the tax was not levied on security which was held for the period of more than one year.

According to sources, the capital gain u/s 37-A of the Income Tax Ordinance 2001 is treated as a separate block of income.

The loss on disposal of securities in a tax year is adjustable against again from any other securities chargeable to tax u/s 37-A, but the loss was not to be carried forward to the subsequent tax year.

For Tax Year 2011, where the security is held for less than six months, the rate of tax is 10 percent where the security is held for more than six months and less than one year, the rate of tax is 7.5 percent for Tax Year 2011.

As per provision of sub-section (5B) of Section 147 of the Income Tax Ordinance 2001, a person deriving taxable capital gain is required to pay advance tax @ 2% of the capital gain on quarterly basis where the security is held for less than 6 months and 1.5% of the capital gain on quarterly basis where the security is held for more than 6 months but less than 12 months.

However, there is no responsibility of the brokerage house or of the stock exchange in this respect.

This is the main lacuna in the provisions of Section 37-A because the market share of the individual persons in the stock market is more than 57% but are not paying advance tax u/s.147(B) of the Income Tax Ordinance and also most of them have not filed returns for the Tax Year 2011, sources explained.

Sources further said that the negligible tax has been paid on this score.

The tax department has sought information from the Karachi Stock Exchange (KSE) regarding capital gain earners during the period July 1, 2010 to 2011 to be submitted to FBR for circulation among field formations for necessary action.

There is an urgent need to change the provisions of law as contained in Section 37A and hold responsible stock exchange / brokerage houses to withhold tax from any amount of capital gain arising from sale of securities held for the periods as mentioned above, sources added.

farzooq bahi CGT realted news did u good impact mrkt ya bad  explain pls FBR  mention individual investor are not  filed their income tax returns for the Tax Year 2011 and paid negligible amount of tax under Income Tax Ordinance 2001. PLS EPLAIN
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on December 17, 2011, 10:27:29 AM
FBR wandering for investors’ information; approaches CDC
Saturday, December 17, 2011

KARACHI: The Federal Board of Revenue (FBR) is wandering through institutions related to the equity markets for obtaining information of investors, who disposed of their securities during the last fiscal year, sources said.

The revenue body on Friday issued a notice to the Central Depository Company (CDC) to acquire the traded shares in the Karachi Stock Exchange during FY11, they said. The CDC mainly operates the Central Depositary System for equity, debt and other financial instruments that are traded in Pakistani capital market, they said.

A week ago, the revenue body had served the notice on principal officer of the Karachi Stock Exchange for the purpose, the sources said. “In response, the KSE flatly refused to provide such information, saying it does not maintain the record of traded shares,” a senior FBR official said on the condition of anonymity.

In a recent letter to CDC, the official said, the FBR acquired the information of investors, who disposed of their securities during July 1, 2010 to June 30
.

The information included names, complete address, CNIC and NTN, the official said. The revenue body is eager to obtain the information because it is vital to detect black money in the economy, he said.

The exercise was initiated after imposition of the capital gains tax through the Budget 2010/11 because earlier it was exempted for the last three decades so the tax officials have no authority to ask about the information of investment made in the equity markets.

After obtaining investors information, the details would be circulated to all the tax departments for identifying the source of income, the official said. Analysts said that the initiatives of the revenue body will further deteriorate the equity market position, which already witnessed low volume due to the prevailing energy crisis and security issues.

They said the issue of the capital gains tax also contributed to discourage investment in the stock exchanges. The members of the stock exchanges are lobbying to get relaxation regarding provision of source of investment and, in this regard, members of the Karachi Stock Exchange recently met Member Inland Revenue, FBR.

The capital gains tax was imposed in fiscal year 2010/11 on the sale of securities. The first annual return filing after imposition of the tax disappointed the revenue body as majority of the individual investors had not filed their returns.

“The main reason of low return filing was lacuna in the law,” according to an analysis report of the FBR. “There is no responsibility of the brokerage house or of a stock exchange in this respect,” it added.

The market share of the individual persons in the stock market is more than 57 percent, but they are neither paying advance tax nor filing returns, the report said.


The tax managers have requested the revenue body to amend the law and hold stock exchange or brokerage houses responsible to withheld tax from any amount of the capital gain arising out of the sale of securities.

The government introduced different rates for holding periods of securities in the Budget 2010/11 and for the securities held less than six months the tax rate was 10 percent for the tax year 2011 and 2012.

The rate, however, will increase and settle at 17.5 percent by the tax year 2015, according to the Income Tax Ordinance 2011.

The tax rate for holding period of the securities of more than six months, but less than 12 months has been decided to be increased by five percent annually and will be 10 percent by the tax year 2016.

The tax rate will be zero for the securities held for more than one year or more. —Shahnawaz Akhter
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on December 27, 2011, 09:29:53 AM
FBR likely to seek investors’ record
 Shahnawaz Akhter
 Tuesday, December 27, 2011

KARACHI: Uncertainties in the equity market about providing investors record is likely to end as the revenue authorities are set to agree to ask records from date of imposition of the capital gains tax (CGT), official sources told The News on Monday.

“The proposal of the stakeholders for providing investors’ record from imposition of CGT is under consideration,” said a senior official at the Federal Board of Revenue (FBR). The revenue body following the tax laws has started questioning members of the stock exchanges about the investments made during the last three to five years in capital markets after filing of the income tax return for the first time after CGT implementation.

The stock brokers are contesting that it was difficult to provide previous years’ records as the CGT is not in vogue. The issue was discussed in the recent seventh meeting of the Tax Reform Core Group (TRCG) chaired by Finance Minister Dr Abdul Hafeez Shaikh.

The sources said that the finance minister categorically rejected any idea of withdrawing the CGT or bringing it under the presumptive tax regime (PTR). Bringing this tax under PTR means taxpayers pay their final liability and no question will be asked about investments, the sources said.

The sources said that Muhammad Ali, Chairman, Securities and Exchange Commission of Pakistan (SECP), made a presentation on the stock exchanges and fall in volumes after imposition of CGT, besides other issues, including law and order and energy crisis.

The federal finance minister directed the SECP chairman to finalise the written proposals by January 3, 2012, which should include recommendations of the stock exchanges members. About two weeks ago a delegation of the Karachi Stock Exchange (KSE) met Shahid Hussain Asad, Member Inland Revenue (IR), FBR, to apprise him about the difficulties being faced by the traders due to CGT issue, the sources said.

“The delegation was suggested to come up with written proposals for the consideration,” Member IR said. The CGT was re-imposed in fiscal year 2010/11 on the sale of securities after about three decades.

The first annual return filing ended on November 30, after imposition of the tax disappointed the revenue body as majority of the individual investors had not filed their returns. The revenue collected under this head was Rs300 million, which was also very low against the targeted amount of around Rs2 billion.

“Some more revenue will be collected as corporate annual returns are due on December 31,” an official at the FBR said. Officials at different field offices of the revenue body, however, said that amendment in this regard would require parliamentary approval.

An official at the Regional Tax Office (RTO) said that the response from the stock market traders in filing income tax returns disappointed the FBR because a number of returns received from stock markets.

The official said that the main reason of low filing of returns was lacuna in the law as no responsibility is fixed for paying advance tax or filing tax returns. “The market share of the individual persons in the stock market is more than 57 percent, but they are neither paying advance tax nor filing returns,” according to an official communication sent to Member Inland Revenue.

The tax managers have requested the FBR to amend the law and hold the stock exchanges or brokerage houses responsible to withhold tax from capital gain.

The government introduced different rates for holding periods of securities in the Budget 2010/11. For the securities held for less than six months the tax rate is 10 percent for the tax year 2011 and 2012.

The rate, however, will increase and settle at 17.5 percent by the tax year 2015, according to the Income Tax Ordinance, 2011.

The tax rate for holding period of the securities of more than six months, but less than 12 months has been decided to be increased by five percent annually and will be 10 percent by the tax year 2016. The tax rate will be zero for the securities held for more than one year or more.
Title: Re: CGT -- Capital Gains Tax
Post by: imran.hafeez on December 27, 2011, 09:42:26 AM
One thing is for sure now that CGT is not going away

No need to pay heed to any rumors now.

Finance Minister categorically denying that CGT cannot be withdrawn
Title: Re: CGT -- Capital Gains Tax
Post by: Dhillon on December 30, 2011, 06:07:05 PM
CGT rules to be revisited by the SECP

According to the news reports, the SECP is expected to propose new mechanism for collection of CGT (Capital Gains Tax) on stock exchanges to finally address the concerns of the investors. This step alongwith expected change in the margin regime of the financing product (Margin Trading System) will definitely improve much-needed volumes and thus support to the capital markets of the country, which since the imposition of the CGT have been on a steep decline as far as investor activity is concerned. These steps will ensue better price discovery and much-needed liquidity at the bourses which will fetch investors back to the capital markets in future.   

Source InvestCap

Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on January 05, 2012, 09:19:56 AM
 


SECP, FBR officials to mull relaxing CGT rules

 Salman Siddiqui
 Thursday, January 05, 2012


KARACHI: The officials of Securities and Exchange Commission of Pakistan (SECP) and Federal Board of Revenue (FBR) are scheduled to meet in Islamabad on Thursday to consider relaxing the Capital Gains Tax (CGT) rules, official sources told The News on Wednesday.

The meeting was supposed to be held on Tuesday, but was postponed due to some other engagements of the concerned officials, an FBR official said.

The FBR may agree to collect investors’ shares trading data from the date CGT was imposed on shares transaction. “At present, FBR is demanding such data for the last five years prior to CGT imposition,” an official said.

He said this with reference to a previous meeting between SECP and Finance Minister Hafeez Shaikhj, in which the Minister had reportedly agreed to allowing access to investors’ shares trading data from the date the CGT was imposed on July 01, 2010.

In another separate meeting to be held in a week or two, SECP chairman Muhammad Ali would deliver a presentation on the same matter at ministry of finance, an SECP official said.

SECP, on behalf of the Karachi Stock Exchange (KSE) and other two bourses of the country, would try to explain to the officials of FBR and ministry of finance, as to how the implementation of CGT has affected the bourses and their members.

The average daily trade turnover at KSE has fallen to 10 years low of 81 million shares in the previous calendar year 2011 and caused several members to render their staff jobless and close their brokerage houses.

KSE and its members want FBR and finance ministry to collect the said tax under Presumptive Tax Regime (PTR) instead of on shares’ sale. The collection of the tax under PTR regime would not demand members and investors to disclose their source of income, it was learnt.

Finance minister had categorically denied doing so in the previous meeting and said that the tax would not be exempted, nor be collected under PTR regime.

“The maximum relaxation that ministry may allow, may be the collection of investors’ data from the date the tax was imposed instead of for the last five years period,” FBR official said.

The Federal Board of Revenue directs KSE not to collect tax on services.

In a separate development, FBR has directed the Karachi Stock Exchange (KSE) not to deduct tax on services to its members up to June 30, 2012, said a notice of KSE on Wednesday.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on January 06, 2012, 10:34:57 AM
SECP, revenue body fail to reach

 Salman Siddiqui
 Friday, January 06, 2012

KARACHI: Securities and Exchange Commission of Pakistan (SECP) and Federal Board of Revenue, in their meeting held on Thursday at Islamabad, failed to reach a consensus on which rule should be amended to dilute the impact of Capital Gains Tax (CGT) on shares transaction, an FBR official told The News.

“However, the officials of the SECP and the FBR expressed commitment to do something to revive the trading volumes at stock markets of the country,” he said. The CGT involves disclosure of the source of income of the investors, which is one of the causes for trading volumes falling to 10 year lows at the Karachi Stock Exchange and closure of some brokerage houses.

SECP officials, led by its chairman Muhammad Ali, made a point that FBR should collect CGT under Presumptive Tax Regime (PTR) instead of on sale, the official said. “But officials of FBR refused to do so and explained that the aim of CGT was to know the sources of income and expense on shares transaction of each and every investors. Charging of such tax under PTR does not allow FBR to audit and come know sources of income and expense on shares transactions,” he added.

He said that officials of SECP and FBR would meet again next Tuesday and SECP was likely to come up with a different proposal on softening rules for CGT. Moreover, SECP was yet to give proposal on the subject in writing, he added.

It would be worth mentioning here that FBR had invited proposals from SECP and Karachi Stock Exchange (KSE) on the subject in writing about three weeks ago, but they were yet to do so. He said that FBR was seriously considering doing something to dilute CGT impact on shares transaction, as it wanted to revive trading volumes at the local bourses.

Earlier, Finance Minster Hafeez Shaikh had reportedly agreed to collect investors’ shares trading data from the date the capital gains tax (CGT) was imposed on shares transaction. “At present, FBR is demanding such data for the last five years prior to CGT imposition,” he added.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on January 13, 2012, 08:13:07 AM

Capital market, corporate sector boost: FBR urged to consider new taxation proposals

 January 13, 2012
SOHAIL SARFRAZ
0 Comments
 Securities and Exchange Commission of Pakistan has proposed the Federal Board of Revenue to consider new taxation proposals for development of capital market and corporate sector.

This includes income-based Capital Gain Tax on stock market against the existing transaction based fixed rate of CGT, major reduction in corporate tax rate and increase in the tax rates on the National Saving Schemes (NSS).


Chairman SECP Muhammad Ali on Thursday shared the tax proposals for the revival of capital market and corporate sector with the National Assembly Standing Committee on Finance, which met with Fauzia Wahab MNA in the chair at SECP head office.

The preliminary discussion on the tax proposals has been done by the SECP and FBR whereas detailed budgetary proposals will be sent to the FBR by February 2011, the SECP Chairman stated.

Sharing implications of tax on stock exchanges, the SECP Chairman informed the committee that the tax on the investors of stock exchanges should be on the basis of income and not on transactions.

The SECP does not support transaction-based tax on stock market investors because it would not encourage documentation.

Prior to 2010, there was a tax on stock market and investors made huge profits from the market.

However, most of the investors were not filing their income tax returns and even the FBR was not pressing the stock market investors to file the returns.

After the imposition of CGT on stock market, investors are not willing to invest in shares with the argument that the tax department could ask for the source of investment, as under the existing law, source of investment could be asked by the FBR from those coming to invest in the stock market.

The CGT has created a serious problem in the stock market and people have pulled out huge investment from the market and now the trading volume has touched its' lowest ebb.

He informed that the CGT collection mechanism needs to be revised in such a way that the people again start making investment in the stock exchanges.

The SECP has proposed the FBR to collect the CGT on traded stocks at the level of National Clearing House and not on transactions made in the market on day to day basis.

The SECP has further proposed the FBR to allow functioning of the new mechanism for at least two years to restore the confidence of the investors.

However, fixed tax should not be imposed on the stock market transactions.

The SECP Chairman stated that the commission is in favour of documentation along with income based CGT on stock market.

The objective of CGT collection and documentation would be met by implementation of the proposals of the SECP on the CGT.

About the impact of the CGT on the stock market, SECP Chairman informed the committee that prior to the imposition of CGT, the FBR had collected Rs 4.5 billion tax from stock market and after the imposition of CGT it's collection has drastically reduced to Rs 500 million.

While strongly pleading the case of reduction in corporate tax rate, SECP Chairman informed the committee that globally tax rate on listed companies or corporate sector is low and high tax is charged from the non-listed companies.

In Pakistan, the tax regime on corporate sector is entirely different as compared to other best tax administrations.

The corporate sector which is more documented and making huge tax contributions to national kitty is being charged with higher tax rate of 35% rate and non-listed companies are enjoying documentation immunity as well as paying 25% tax with no regulatory requirement.

It is unfortunate to note that the units not paying tax are flourishing and those who are paying high tax in the corporate sector have to fulfil all regulatory requirements including compliance of tax laws etc.

The SECP Chairman termed the un-favourable tax regime for corporate sector as main hurdle in promoting listing of companies in stock market.

Giving a comparison of corporate sector in countries similar like Pakistan has at least one million companies.

On the other hand the number of listed companies in Pakistan is continuously declining.

Out of 60,000 registered companies, only 10% listed companies are making huge tax contributions and 90% are avoiding tax payments, being non-listed companies.

There should be incentives for the companies to come forward and list them selves in stock market, the reduction in corporate tax rate could help increase in listing of companies as well as increase in tax collection from this key sector.

He informed that initially the proposal of reduction in corporate tax rate has been discussed at the level of FBR and SECP has plans to discuss this issue with Finance Minister and Prime Minister for consideration and approval.

The SECP Chairman said that the commission would also propose rationalisation in the higher interest rate of the National Saving Schemes.

Similarly, tax rate on the NSS needs to be enhanced.

People are more interested in keeping their money in NSS keeping in view higher interest available to them rather than investing it in productive sectors.

In this way, huge public savings are being parked in un-productive area.

If such money is brought into the economy and is invested in productive economic activity of the country it could result improvement in economy GDP as well as this can in job creation in private sector.

In his presentation, SECP Chairman stressed the need for addressing the distortion created by the national saving schemes.

During the discussion on these tax proposals, SECP Chairman said that SECP's final budget tax proposals would be shared with the Committee for it's input.

The chairperson of the committee appreciated the proposals and asked the SECP to finalise and share it with main stakeholders in the government.

It was decided in the meeting to present comprehensive tax proposals after thorough consultations with stakeholders.

In this regard, the SECP would submit its tax proposals to the standing committee for consideration at the time of the preparation of the Finance Bill.

Former Information Minister Qamar-Zaman Kaira, MNA speaking on the occasion said that such kind of tax breaks had also been introduced in the past but failed to get desired results.

He asked the SECP to arrange a meeting of top officials of SECP, FBR, Ministry of Finance, State Bank of Pakistan and other public sector stakeholders so as to come up with concrete and agreed proposal on CGT at stock market.

Responding to this, Muhammad Ali informed the committee that all the tax proposals are being finalised in consultation with the stakeholders for onward transmission to the FBR for consideration.
Title: Re: CGT -- Capital Gains Tax
Post by: Tezihunt on January 13, 2012, 09:05:05 AM
@ Farzooq
Thanks for the update on CGT.
Title: Re: CGT -- Capital Gains Tax
Post by: 007 on January 13, 2012, 11:23:31 PM
words are wind, nothinng has come to form yet  :(
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on January 14, 2012, 10:00:19 PM
words are wind, nothinng has come to form yet  :(

http://www.kse.com.pk/notices-updates/detail2.php?id=4&nid=030119
Title: Re: CGT -- Capital Gains Tax
Post by: 007 on January 15, 2012, 01:18:04 AM
good developement

but nothing final yet

goodshare though
Title: Re: CGT -- Capital Gains Tax
Post by: M&M on January 15, 2012, 10:39:39 AM
words are wind, nothinng has come to form yet  :(

http://www.kse.com.pk/notices-updates/detail2.php?id=4&nid=030119
iss notice ko parhne ke liye bhi skills chahiye haha
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on January 15, 2012, 11:17:23 AM

Rectification of double taxation anomaly: SECP proposes CGT rate freeze, abolition of WHT
 Sunday, 15 January 2012 09:50
SOHAIL SARFRAZ

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has proposed to the Ministry of Finance to freeze the capital gain tax (CGT) rate at the current level applicable for the year 2011-12, abolish withholding tax under section 233A of the Income Tax Ordinance 2001 to rectify double taxation anomaly on stock exchanges, and defer enforcement of section 111 of Ordinance, 2001 requiring unexplained income or assets for funds invested in capital markets till June 30, 2014.

Sources told Business Recorder here on Saturday that SECP Chairman Muhammad Ali has written a letter to Minister of Finance Dr Abdul Hafeez Sheikh, FBR Chairman Salman Siddique and all the three stock exchanges to submit a workable solution on the issue of the CGT on securities’ trading. The SECP Chairman has given viable suggestions which would not only ensure collection of the CGT from stock exchanges, but also confirm documentation in a systematic manner without disturbing FBR revenue collection.

According to SECP proposals to the Finance Ministry, continuation of withholding tax after CGT is double taxation ie taxing both turnover and net income. Equity demands that with the imposition of CGT, withholding tax (WHT) on turnover should be done away with. The SECP has also proposed comprehensive amendments in the Income Tax Ordinance 2001 to revise collection mechanism of the CGT from stock exchanges.

The SECP has further proposed that National Clearing Company of Pakistan (NCCPL) shall act as a withholding agent to deduct and deposit the CGT from investors’ transactions. The NCCPL shall also provide investor-wise monthly report of CGT deducted and deposited for each investor to FBR and issue a certificate to the investor of the amount deducted. The investor will file tax return, including the CGT deposited, based on the certificate provided by NCCPL and would be exempt from CGT record maintenance requirements under CGT Rules of the FBR.

The SECP has categorically conveyed to the Federal Board of Revenue (FBR) that a general consensus has been developed, saying that maintaining status quo on the CGT is not in the interest of the economy as it has adversely impacted tax collection, investors’ sentiment, capital formation and overall functioning of the capital markets.

The SECP has written a letter to the FBR Chairman Salman Siddiquei and all three stock exchanges on the issue of the CGT on securities trading. According to the SECP letter, during deliberations between the SECP and the FBR there was a general consensus that maintaining status quo on capital gain tax (CGT) is not in the interest of the economy as it has adversely impacted tax revenue collection as well as trading volume at capital markets (CM). Besides these, CGT has adversely affected investors’ sentiment, capital formation and overall functioning of the capital markets.

The SECP has objectively analysed the situation by looking at the global trends, impact of CGT on the capital market, and issues with present CGT regime and is placed to share its proposal to revamp CGT regime in a manner which not only addresses issues highlighted above but also meets overall objectives of FBR, SECP and capital market.

The CGT regime is in place in many developed jurisdictions, like Australia, Canada, Brazil, China, France, and Germany. However, it encompasses all asset classes such as securities, immovable properties, collectibles, and other personal assets. While in developing jurisdictions CGT applicability varies from jurisdiction to jurisdiction.

The CGT regimes across the globe have evolved differently as per each country’s political, fiscal and economic environment. Securities are usually brought under CGT regime after a country has achieved certain level of capital market depth, investor outreach, and adequate capital formation and documentation.

In Pakistan, securities’ trading remained exempt from CGT for 36 years (since 1974) till June 30, 2010. Imposition of CGT on securities trading from July 1, 2010 has not only impacted the tax revenue (less than 10 percent of figure three years ago) but has also reduced average traded value to the lowest level during the last ten years, the SECP said.

Tax collection data depicted that value traded at stock exchange has direct bearing on the tax collection, and vice versa.

This is evidence of market’s willingness to pay taxes as capital market and WHT imposed in 2004 and rate of tax doubled in 2006, were well absorbed by the market since then there is ease in transaction; economic viability and minimum interaction with tax authorities.

In the absence of above three factors, apart from decline in trading volume and revenue, existing CGT regime has also impacted capital market in following manner:

1. Price Discovery:

Dwindling trading volume post-CGT imposition has raised question marks on the effectiveness of price discovery at the stock exchanges and ha increased impact cost. This raises issue of sustainability of the quoted prices and has ramifications as Pakistan is excluded from various world indices.

2. Withdrawal of investors:

Number of active investors in capital market has dramatically reduced, in particular retail investors. The situation becomes even more complex as investors exited the market and moved funds to other business avenues, which are either exempt or under presumptive tax regime.

3. Business viability:

Revenue of exchanges and market intermediaries is directly linked with trading volume; decline of volume has raised viability concerns of these entities as reflected in Chart-II. A number of intermediaries have either closed or are facing closure due to financial difficulties.

4. Capital formation and resource allocation:

A number of companies have deferred plans of fund raising from the capital market due to lack of investors’ appetite. In recent past, IPO of two major business houses remained under-subscribed. Trend is alarming for overall economic activity and GOP privatisation program through capital market.

The SECP has further informed the Finance Ministry that it is pertinent to mention that Global Financial Crisis in 2008 impacted capital markets across the globe. However, majority of capital markets, except Pakistan, recovered from its adverse effects and gradually stabilised or grew.

Highlighting the issue in CGT implementation and objectives of stakeholders, sources referred to the SECP letter and said that the capital market remained exempt from CGT for past 36 years. This created an anomaly in shape of undocumented gains accrued through transactions in the capital market during this period. Even though the requirement of filing of tax returns was there, it was neither followed by capital market nor implemented by FBR. This led to a situation where capital market investors ended up with legitimate but undocumented gains. Abrupt change from exempt regime without factoring this anomaly has forced investors to withdraw funds from capital market.

Another issue is cumbersome calculation and documentation requirements embedded in CGT regime. Prior to CGT imposition, capital market remained under the presumptive tax regime under which tax was deducted and deposited by the exchange. Lastly, continuation of withholding tax after CGT is double taxation i.e. taxing both turnover and net income. Equity demands that with imposition of CGT, withholding tax (WHT) on turnover should be done away with, sources said.

Key stakeholders in Pakistan’s CGT regime are FBR, SECP and capital market including exchanges, intermediaries and investors. Key objectives of these stakeholders are:-

The SECP has proposed that taking into consideration above highlighted issues and stakeholders’ objectives, SECP recommends implementation of following measures in CGT regime that will address the issue and achieve objectives of all stakeholders.

The SECP has also explained the anomaly of undocumented gains during exempt period and double taxation. As the documentation is not available to substantiate the gains made from capital markets transactions during the exempt period, it is proposed that applicability of Section 111 of Income Tax Ordinance, 2001 (ITO) requiring unexplained income or assets may be deferred for funds invested in capital markets till June 30, 2014. Post-June 2014, highest or peak value of an investor’s portfolio between now till then should be treated as income generated from the capital market and part of investor’s wealth.

It is further proposed to abolish the WHT under section 233A to rectify double taxation anomaly and to freeze the CGT rate at the current rate applicable for the year 2011-12.

Following amendments in Second Schedule, Part-IV are proposed to address the issue:

Suspension of applicability of section-111: Applicability of sec-111 shall be suspended from April, 2012 till 30th June, 2014 by inserting clauses 80 and 81 in Part –IV of 2nd Schedule as:

“(80) the provisions of section 111, part X and part XI of Chapter X shall not apply in respect of any amount of income of any income year or years ended on or before June 30, 2014, inserted by individuals in the stock exchange registered in Pakistan.”

Provided that no tax shall be deducted under section 233A(1) till June 30, 2014.

“(81) No assessment orders for an individual will be made under section 121, 122, 122A, 122B, 122C or 123 for any amounts declared in the returns as inserted under clause 80 Part-IV of Second Schedule on or after April 1, 2012 till June 30, 2014”.

It has been further proposed that no audit proceedings under section 177 will be undertaken for the declared amount.

Freezing Existing CGT rate: To simplify calculation and achieve smooth implementation of CGT, it is proposed to freeze the CGT rate at existing levels and a new clause 27 be introduced in Part-II of the 2nd Schedule:

“(27) The rate of tax specified in Division VII of Part-I of the First Schedule shall be 10 percent on capital gains arising on securities held for a period up to six months and 8 percent on capital gain arising on securities held for a period above six months to one year, for any person for any amount inserted in the stock markets in Pakistan on of after April 1, 2012 till June 30, 2014”.

As far as calculation and documentation requirements are concerned, the SECP stated that to simplify and ensure timely deposit of tax revenue, centralized collection mechanism at National Cleaning Company of Pakistan (NCCPL) is recommended. The NCCPL, shall act as a withholding agent to deduct and deposit the CGT from investors transactions. At the end of every month, NCCPI, shall deposit the amount deducted from investors making capital gains after adjusting for the investors suffering capital losses (i.e. on net aggregate basis) with FBR. The NCCPL, shall also provide investor wise monthly report of CGT deducted and deposited for each investor to FBR and issue a certificate to the investor (at year end) of the amount deducted.

Sources said that the investor will file tax return, including the CGT deposited, based on the certificate provided by NCCPL and would be exempt from CGT record maintenance requirements under CGT Rules. The FBR will benefit with immediate CGT revenue stream from the capital market while for investors this would entail no tax avoidance and no interface with FBR. Following amendments are acceded in Part III of Income Tax Rules of 2002.

Rule 131 “payment of tax on capital gain” clause (3) shall accordingly be amended and Rule 131 : “liability of broker” shall be declared.

Rule 131 of CGT Rules shall therefore not be applicable for individual investors.

The SECP stated that the proposed amendments in CGT regime bear advantages including documentary trail of undocumented income; no presumptive regime – example for other sectors; correction of anomaly where exempted gains in past were not documented; higher revenue for the government; broadening of tax base; depth in trading volume; efficient price discovery; efficient capital formation and resource allocation; higher possibility for privatisation and attraction of foreign portfolio investment, SECP maintained.

Sources further said that an argument against the proposals can be that gains made outside capital market would also be documented and scheme of payment of investment tax involving declaration and upfront onetime charge may be suggested. In our view, even today there are options available in the country through which income could be documented incurring onetime upfront cost without any benefit to the exchequer. Therefore, any upfront payment of tax before making an investment would be counterproductive in achieving the overall objective of the proposal, as well as objectives of various stakeholders highlighted above i.e. documentation of income and economy broadening of tax base, higher tax revenue, revival of capital market, etc. Furthermore, the tax collection by the government from CGT and other income, for all times to come once an investment is made and documented, will be far greater than onetime upfront charge, the SECP explained.

As per SECP, the proposal is the best way forward, not only to retain the overall spirit of CGT regime but also to achieve various stakeholders’ objectives and revive capital market. It is believed that its implementation will, apart from generating additional revenue for the government, attain sustainable economic growth for all sectors of the economy, in particular the capital markets.

The SECP may meet to discuss the proposal in detail, and once broad contours of the proposed amendments in CGT regime are agreed, officers from FBR and SECP can work out the modalities for its early implementation, sources added
Title: Re: CGT -- Capital Gains Tax
Post by: 007 on January 15, 2012, 07:07:53 PM
words are wind, nothinng has come to form yet  :(

http://www.kse.com.pk/notices-updates/detail2.php?id=4&nid=030119
iss notice ko parhne ke liye bhi skills chahiye haha

yeah it was so blurred only guessed out the wordings may be we will get a clear picture some time soon  ;)
Title: Re: CGT -- Capital Gains Tax
Post by: imran.hafeez on January 15, 2012, 07:36:39 PM
Secp proposal was released on 14th jan(holiday). I think it will have a positive impact on Monday.
Title: Re: CGT -- Capital Gains Tax
Post by: blue chip on January 15, 2012, 07:41:46 PM
seemz like huge positivity ahead ...golden days cumin back INSALLAH
Title: Re: CGT -- Capital Gains Tax
Post by: M&M on January 15, 2012, 09:46:30 PM
words are wind, nothinng has come to form yet  :(

http://www.kse.com.pk/notices-updates/detail2.php?id=4&nid=030119
iss notice ko parhne ke liye bhi skills chahiye haha

yeah it was so blurred only guessed out the wordings may be we will get a clear picture some time soon  ;)
http://www.pakinvestorsguide.com/index.php/topic,564.msg68562.html#msg68562
Title: Re: CGT -- Capital Gains Tax
Post by: 007 on January 16, 2012, 11:29:45 AM
no i read that i menat the circular on kse site
Title: Re: CGT -- Capital Gains Tax
Post by: M&M on January 20, 2012, 11:15:29 AM
General consensus between SECP and FBR: ‘Status quo on CGT regime to hurt economy’
January 15, 2012

* SECP proposes to FBR for 10% CGT on gains arising from securities held for 6 mths

* 8% CGT for above 6 mths to a year

By Sajid Chaudhry

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) and the Federal Board of Revenue (FBR) on Saturday reached a general consensus that maintaining the status quo regime on the capital gains tax (CGT) will hurt the economy.

In this regard the SECP has proposed to the FBR to apply 10 percent CGT on capital gains arising from securities held for a period of up to six months and 8 percent on capital gains arising on securities held for a period of above six months to a year, for any person for any amount inserted in the stock markets in Pakistan on or after April 1, 2012 till June 30, 2014.

It has also proposed FBR to abolish the withholding tax (WHT) under Section 233A of the Income Tax Ordinance 2001 to rectify double taxation anomaly, freeze the CGT rate at the current rate applicable for the year 2011-12 and applicability of Section 111 of Ordinance, 2001 requiring unexplained income or assets may be deferred for funds invested in capital markets till June 30, 2014.

Sources informed that a general consensuses has been developed between SECP and FBR that maintaining status quo on CGT is not in the interest of the economy as it has adversely impacted tax revenue collection, investor sentiment, capital formation and overall functioning of the capital markets.

The SECP has written a letter to the FBR Chairman Salman Siddique and all three stock exchanges on the issue of the CGT on securities trading. The SECP has objectively analysed the situation by looking at the global trends, impact of CGT on the capital markets, and issues with present CGT regime and is placed to share its proposal to revamp CGT regime in a manner which not only addresses issues highlighted above but also meets overall objectives of FBR, SECP and capital markets. The CGT regime is in place in many developed jurisdictions, like Australia, Canada, Brazil, China, France, and Germany, however it encompasses all asset classes such as; securities, immovable properties, collectibles, and other personal assets. While in developing jurisdictions CGT applicability varies from jurisdiction to jurisdiction.

The CGT regimes across the globe have evolved differently as per each country’s political, fiscal and economic environment. Securities are usually brought under CGT regime after a country has achieved certain level of capital market depth, investor outreach, and adequate capital formation and documentation.

In Pakistan, securities trading remained exempted from CGT for 36 years (since 1974) till June 30, 2010. Imposition of CGT on securities trading from July 1, 2010 has not only impacted the tax revenue (less than 10 percent of figure three years ago), but has also reduced average traded value to the lowest level during the last 10 years, SECP said. Tax collection data, depicted that value traded at stock exchange has direct bearing on the tax collection and vice versa. This evidences the market’s willingness to pay taxes as CGT and WHT imposed in 2004 and rate of tax doubled in 2006, were well absorbed by the market and since then there was ease in transaction; economic viability and minimum interaction with tax authorities. In the absence of above three factors, apart from decline in trading volume and revenue, existing CGT regime has also impacted the capital markets.

Sources further said that an argument against the proposal could be that gains made outside capital markets would also be documented and scheme of payment of investment tax involving declaration and upfront one time charge may be suggested. Even today there are options available in the country through which income could be documented incurring one time upfront cost without any benefit to the exchequer. Therefore, any upfront payment of tax before making an investment would be counter productive in achieving the overall objective of the proposal, as well as objectives of various stakeholders.

As per SECP, the proposal is the best way forward, not only to retain the overall spirit of CGT regime but also to achieve various stakeholders’ objectives and revive capital markets. It is believed that its implementation will, apart from generating additional revenue for the government, attain sustainable economic growth for all sectors of the economy, in particular the capital markets. The SECP may meet to discuss the proposal in detail, and once broad contours of the proposed amendments in CGT regime are agreed, officers from FBR and SECP can work out the modalities for its early implementation, sources added.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on January 21, 2012, 10:21:28 AM

Hafeez visiting KSE today: New procedure for CGT collection may be unveiled
 Saturday, 21 January 2012 09:28

SOHAIL SARFRAZ & AHMED MALIK

ISLAMABAD: Minister of Finance Dr Abdul Hafeez Sheikh is expected to announce some major incentives to the investors of stock exchanges including revised procedure on collection of the capital gains tax (CGT) and immunity from probing source of investment made in stocks and shares during past, at the Karachi Stock Exchange (KSE) on Saturday (January 21).

Sources told Business Recorder here on Friday that Finance Minister, SECP Chairman Muhammad Ali and senior officials of the Federal Board of Revenue (FBR) and Securities and Exchange Commission of Pakistan (SECP) would visit KSE and Finance Minister would also address the members and brokers of the KSE. Senior members and brokers of Lahore Stock Exchange (LSE) and Islamabad Stock Exchange (ISE) would also participate in the function at the KSE.

According to sources, there is a strong possibility that the Minister of Finance would announce that the past investment in the stocks and shares will not be probed under section 111 of the Income Tax Ordinance 2001.

Moreover, it is also expected that the government would also impose a bar on the officials of Inland Revenue Service from probing investments made in the stocks and shares during the past five years. In case of this announcement has been made by Finance Minister, the FBR cannot ask for source of investment in stock and shares during the last five years.

The rate of the CGT on the stock exchanges may not be changed, but the government can freeze the CGT rate at existing levels for 2011-12 as per Income Tax Ordinance 2001, if necessary, sources maintained.

According to the invitation of the KSE to the guests, 'Finance Minister along with Chairman SECP will be addressing the capital market constituents on the CGT reforms and other market developmental matters on Saturday (January 21) at Karachi Stock Exchange'.

The SECP has proposed that as the documentation is not available to substantiate the gains made from capital markets transactions during the exempt period, it is proposed that applicability of Section 111 of Income Tax Ordinance, 2001 requiring unexplained income or assets may be deferred for funds invested in capital markets till June 30, 2014. Post-June 2014, highest or peak value of an investor's portfolio between now till then should be treated as income generated from the capital market and part of investor's wealth.

It is further proposed to abolish the WHT under section 233A to rectify double taxation anomaly and to freeze the CGT rate at the current rate applicable for the year 2011-12.

The SECP has proposed that the continuation of withholding tax after CGT is double taxation i.e. taxing both turnover and net income. Equity demands that with the imposition of CGT, withholding tax (WHT) on turnover should be done away with.

The SECP has also proposed comprehensive amendments in the Income Tax Ordinance 2001 to revise collection mechanism of the CGT from stock exchanges. The SECP has further proposed that National Clearing Company of Pakistan (NCCPL) shall act as a withholding agent to deduct and deposit the CGT from investors' transactions.

The investor will file tax return, including the CGT deposited, based on the certificate provided by NCCPL and would be exempt from CGT record maintenance requirements under CGT Rules of the FBR.

The SECP has further proposed to freeze the CGT rate at existing levels and a new clause 27 be introduced in Part-II of the 2nd Schedule of the Income Tax Ordinance 2001.

The SECP stated that the proposed amendments in CGT regime bear advantages including documentary trail of undocumented income; no presumptive regime - example for other sectors; correction of anomaly where exempted gains in past were not documented; higher revenue for the government; broadening of tax base; depth in trading volume; efficient price discovery; efficient capital formation and resource allocation; higher possibility for privatisation and attraction of foreign portfolio investment, SECP maintained.

"Finally the news that stayed the core reason behind over 865 points gains in last six sessions is likely to be made public, when the government dignitaries will visit KSE", Hasnain Asghar Ali at Aziz Fidahusein Co said.

"The rumours echoing in the arena suggesting acceptance of proposals forwarded by the SECP regarding CGT computation by National Clearing Company of Pakistan Limited (NCCPL) and amnesty for investors by FBR and Ministry of Finance," he added.

The imposition of CGT and its mode of collection remained a major concern for the market players since its imposition.

Analysts believe that the imposition of CGT and its mode of collection was the major reason behind the drastic decline in the daily trade at KSE.

"The significant increase in daily trade was due to aggressive participation of local investors on expectations over the positive news regarding CGT likely to be announced by the Finance Minister during his visit to KSE on Saturday," analysts said.
Title: Re: CGT -- Capital Gains Tax
Post by: malikk on January 21, 2012, 04:13:03 PM

Hafeez visiting KSE today: New procedure for CGT collection may be unveiled
 Saturday, 21 January 2012 09:28

SOHAIL SARFRAZ & AHMED MALIK

ISLAMABAD: Minister of Finance Dr Abdul Hafeez Sheikh is expected to announce some major incentives to the investors of stock exchanges including revised procedure on collection of the capital gains tax (CGT) and immunity from probing source of investment made in stocks and shares during past, at the Karachi Stock Exchange (KSE) on Saturday (January 21).

Sources told Business Recorder here on Friday that Finance Minister, SECP Chairman Muhammad Ali and senior officials of the Federal Board of Revenue (FBR) and Securities and Exchange Commission of Pakistan (SECP) would visit KSE and Finance Minister would also address the members and brokers of the KSE. Senior members and brokers of Lahore Stock Exchange (LSE) and Islamabad Stock Exchange (ISE) would also participate in the function at the KSE.

According to sources, there is a strong possibility that the Minister of Finance would announce that the past investment in the stocks and shares will not be probed under section 111 of the Income Tax Ordinance 2001.

Moreover, it is also expected that the government would also impose a bar on the officials of Inland Revenue Service from probing investments made in the stocks and shares during the past five years. In case of this announcement has been made by Finance Minister, the FBR cannot ask for source of investment in stock and shares during the last five years.

The rate of the CGT on the stock exchanges may not be changed, but the government can freeze the CGT rate at existing levels for 2011-12 as per Income Tax Ordinance 2001, if necessary, sources maintained.

According to the invitation of the KSE to the guests, 'Finance Minister along with Chairman SECP will be addressing the capital market constituents on the CGT reforms and other market developmental matters on Saturday (January 21) at Karachi Stock Exchange'.

The SECP has proposed that as the documentation is not available to substantiate the gains made from capital markets transactions during the exempt period, it is proposed that applicability of Section 111 of Income Tax Ordinance, 2001 requiring unexplained income or assets may be deferred for funds invested in capital markets till June 30, 2014. Post-June 2014, highest or peak value of an investor's portfolio between now till then should be treated as income generated from the capital market and part of investor's wealth.

It is further proposed to abolish the WHT under section 233A to rectify double taxation anomaly and to freeze the CGT rate at the current rate applicable for the year 2011-12.

The SECP has proposed that the continuation of withholding tax after CGT is double taxation i.e. taxing both turnover and net income. Equity demands that with the imposition of CGT, withholding tax (WHT) on turnover should be done away with.

The SECP has also proposed comprehensive amendments in the Income Tax Ordinance 2001 to revise collection mechanism of the CGT from stock exchanges. The SECP has further proposed that National Clearing Company of Pakistan (NCCPL) shall act as a withholding agent to deduct and deposit the CGT from investors' transactions.

The investor will file tax return, including the CGT deposited, based on the certificate provided by NCCPL and would be exempt from CGT record maintenance requirements under CGT Rules of the FBR.

The SECP has further proposed to freeze the CGT rate at existing levels and a new clause 27 be introduced in Part-II of the 2nd Schedule of the Income Tax Ordinance 2001.

The SECP stated that the proposed amendments in CGT regime bear advantages including documentary trail of undocumented income; no presumptive regime - example for other sectors; correction of anomaly where exempted gains in past were not documented; higher revenue for the government; broadening of tax base; depth in trading volume; efficient price discovery; efficient capital formation and resource allocation; higher possibility for privatisation and attraction of foreign portfolio investment, SECP maintained.

"Finally the news that stayed the core reason behind over 865 points gains in last six sessions is likely to be made public, when the government dignitaries will visit KSE", Hasnain Asghar Ali at Aziz Fidahusein Co said.

"The rumours echoing in the arena suggesting acceptance of proposals forwarded by the SECP regarding CGT computation by National Clearing Company of Pakistan Limited (NCCPL) and amnesty for investors by FBR and Ministry of Finance," he added.

The imposition of CGT and its mode of collection remained a major concern for the market players since its imposition.

Analysts believe that the imposition of CGT and its mode of collection was the major reason behind the drastic decline in the daily trade at KSE.

"The significant increase in daily trade was due to aggressive participation of local investors on expectations over the positive news regarding CGT likely to be announced by the Finance Minister during his visit to KSE on Saturday," analysts said.


Thts great .. thanks FArzooq bhai for the update ..  :biggthumpup:
Title: Re: CGT -- Capital Gains Tax
Post by: blue bird on January 21, 2012, 05:36:06 PM
what happend in today's meeting... Any updates?
Title: Re: CGT -- Capital Gains Tax
Post by: imran.hafeez on January 21, 2012, 05:50:17 PM
Fin Minister was supposed to visit by 3:00pm today. It is 6pm but no news so far.
Title: Re: CGT -- Capital Gains Tax
Post by: sallu05 on January 21, 2012, 05:51:02 PM
Suggestions of Chairman SECP regarding CGT approved: Finance Minister
Title: Re: CGT -- Capital Gains Tax
Post by: msypk on January 21, 2012, 05:53:39 PM
CGT tax rates will be frozen till 2014.people will not be asked by fbr about their money source till 2014.CGT to be collected by NCCPL.
Title: Re: CGT -- Capital Gains Tax
Post by: sallu05 on January 21, 2012, 05:53:55 PM
Source of Income will not be asked till June 2014
Title: Re: CGT -- Capital Gains Tax
Post by: imran.hafeez on January 21, 2012, 06:34:15 PM
Lets suppose, I made a loss of 100,000 in 1st half of the year and 100,000 gain in the 2nd half of the year. By the end of year, i will not have to pay any CGT because of no net gain for the whole Financial Year.

As per the new proposal, NCCPL will charge capital gain tax at source on every transaction. Now who is going to post the adjustments for any losses incurred during that year?

Will we have to file our annual returns to FBR, against which FBR will give adjustments for our losses through a lengthy and long process?
Title: Re: CGT -- Capital Gains Tax
Post by: Mona Darling on January 21, 2012, 06:42:44 PM
Seniors, could you please explain in simple words? How NCCPL will collect CGT and from start date? And how much they will collect? I mean in one lac (100000) profit how much CGT will be charged? and From which date it will be imposed?
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on January 21, 2012, 07:20:47 PM
Yeh tu abhi nccpl ko bhi nahi pata  :skeptic:
Title: Re: CGT -- Capital Gains Tax
Post by: M&M on January 21, 2012, 07:55:07 PM
All #secp tax proposals (including tax amnesty) accepted by min of #finance. Will apply from Apr 1, 2012
1) No source of income will be asked till 2014, afterwards that wealth will be treated as white"
2) withholding tax on sale will be abolished
3) nccpl will deduct capital gains tax avoiding facing IT officers

from twitter
Title: Re: CGT -- Capital Gains Tax
Post by: Ghayyas on January 21, 2012, 08:03:11 PM
Source of Income will not be asked till June 2014

As per the news below (Business Recorder), source of income will not be asked till end 2012.

KARACHI: Federal Finance Minister Dr. Abdul Hafeez Sheikh has announced that all five proposals including tax amnesty for investors at the stock exchanges submitted by the Security Exchange Commission of Pakistan (SECP) has been approved by the government.

This was announced by the finance minister while addressing the members of the Karachi Stock Exchange (KSE) on Saturday.

He announced that this decision will be effective from April 1.

According to the decision, source of income will not be asked from capital market investors till end 2012, thereafter that wealth will be treated as white, withholding tax on sale of shares will be abolished and the National Clearing Company of Pakistan Ltd. (NCCPL) will deduct Capital Gains Tax (CGT) to avoid income tax issues.

Title: Re: CGT -- Capital Gains Tax
Post by: imran.hafeez on January 21, 2012, 08:22:05 PM
is the source of income amnesty till 2012 or 2014?
Title: Re: CGT -- Capital Gains Tax
Post by: M&M on January 21, 2012, 08:22:38 PM
Yeh tu abhi nccpl ko bhi nahi pata  :skeptic:
most likely
investor>broker>nccpl
Title: Re: CGT -- Capital Gains Tax
Post by: M&M on January 21, 2012, 08:26:16 PM
is the source of income amnesty till 2012 or 2014?
kal tak sub clear hojayega
Title: Re: CGT -- Capital Gains Tax
Post by: Irfankhan on January 21, 2012, 08:27:57 PM
Dear M&M. does this mean market can go up after 1 april? what if ministers / policy makers thinking turnout?
Title: Re: CGT -- Capital Gains Tax
Post by: imran.hafeez on January 21, 2012, 08:29:32 PM
market will go up from this monday onwards. Friday rally was on rumors and Monday rally will be on actual confirmed news.

I think this is the time for breakouts
Title: Re: CGT -- Capital Gains Tax
Post by: M&M on January 21, 2012, 08:36:22 PM
Dear M&M. does this mean market can go up after 1 april? what if ministers / policy makers thinking turnout?

market will go up from this monday onwards. Friday rally was on rumors and Monday rally will be on actual confirmed news.

I think this is the time for breakouts
let's hope for the best
technical picture so far is clear .. we're facing trendline resistance and descending triangle pattern on weekly timeline is showing credence.
@imran.hafeez - Buy the rumor, sell the news
Title: Re: CGT -- Capital Gains Tax
Post by: imran.hafeez on January 21, 2012, 09:08:21 PM

Hafeez accepts freezing of CGT rates till 2014, removes WHT on commission

SATURDAY, 21 JANUARY 2012 20:49 0 COMMENTS
KARACHI: Finance Minister Dr Abdul Hafeez Shaikh on Saturday agreed to the proposals of SECP for increasing trade volumes at Karachi Stock Exchange (KSE), removing the withholding tax on brokers' commission and freezing current rate of Capital Gain Tax (CGT) till June 2014.

Addressing KSE members, he said that CGT was an important tax which was imposed on short term gains despite its opposition from KSE members. "This tax will be remembered in the history as it was imposed with honesty and simplicity to ensure that it should not become the source of harassment for investors and trading volumes should not fall. It was imposed with the joint efforts of KSE, SECP and FBR", he recalled.

"I accept these proposals of Security and Exchange Commission of Pakistan (SECP)", he said amid thunder of applause from KSE members and added that these should be operationalised by April 1, 2012.

The minister told brokers that they will find him (the Minister) as their resource person and as assistant in helping out in the problems facing them.

"However, you should also help the government so that it can take care of less privileged and neglected segment of the society", he added.

Referring to the proposal of SECP for the development of capital market, Dr Hafeez said that he will fully support it because it will help in the expansion of this market.

He also suggested KSE to focus of the education of investors about capital market and protection of investors.

Earlier, talking of country's economy, he said that during the last six months, tax collection grew by 27 percent to Rs 840 billion over the same period last year.

He said the GDP growth is expected to the around 4 percent in the current fiscal year based on the improved performance by agriculture sector and industry in the last six months.

"For the first time in the last 24 months, inflation has fallen to single digit (9.6 percent) after reaching as high as 25 percent. This has become possible due to stringent austerity drive of the government and tight monetary policy", he noted.

He said government has spent only 45 percent of the allocated portion of its spending during the six months to curtail inflation in the country.

Expressing his disappointment over the low tax-to-GDP-ratio of 9 percent, he said it was the lowest in the world and added that wealthy people have a habit of not paying tax while the government is also not in a habit to collect tax.

He noted that country's exports were growing at 4 percent while remittances were averaging at $ 1 billion per month.

Dr Hafeez said that though the economic situation was not comfortable, it was manageable. You should not be worried about the economy.

Referring to current energy crisis, he said this can be a problem area in future.

He pointed out that the government has the resources to pay $ 1.2 billion to IMF this year and it was incorporated in the budget. So don't worry, the money is there", he added.

Earlier, Chairman SECP Muhammad Ali in his speech said that the burden of CGT had pulled down the market capitalization of KSE from %$ 75 billion to $ 33 billion, thus wiping out $ 42 billion from the market.

He said the government alone had sustained an income loss of $ 12 billion as state-owned scrips are 30 percent of the total market. Imposing of CGT had affected investors' confidence and brokers' capacity to do business and created liquidity crunch in the market, he added.

He gave proposals for enhancing trade volumes in the market and urged the minister to approve these proposals.

Referring to SECP's efforts to promote growth in the capital market, Ali said that margin financing rules have been amended allowing individual investors to take advantage of margin financing.

Managing director KSE Nadeem Naqvi and chairman KSE Zafar Ahmed also spoke on the occasion.

Business Recorder
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on January 21, 2012, 09:47:33 PM
The point of concern is that there is no relief in cgt which is still there @10%
Title: Re: CGT -- Capital Gains Tax
Post by: kamal on January 21, 2012, 09:51:03 PM
The point of concern is that there is no relief in cgt which is still there @10%

U interpreted it or is it specifically ritten?
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on January 21, 2012, 10:04:17 PM
The point of concern is that there is no relief in cgt which is still there @10%

U interpreted it or is it specifically ritten?

Read the secp proposal http://www.pakinvestorsguide.com/index.php/topic,564.345.html
Title: Re: CGT -- Capital Gains Tax
Post by: M&M on January 21, 2012, 10:06:07 PM
The point of concern is that there is no relief in cgt which is still there @10%

U interpreted it or is it specifically ritten?

Read the secp proposal above

agar cgt remove hojata to damadam mast qalander hona tha
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on January 21, 2012, 10:50:46 PM
WHT on brokers’ commission removed, CGT rates frozen
 APP
(1 hour ago) Today
Finance Minister Dr Abdul Hafeez Shaikh.—File Photo

KARACHI: Finance Minister Dr Abdul Hafeez Shaikh on Saturday agreed to the proposals of Securities Exchange Commission of Pakistan (SECP) for increasing trade volumes at the Karachi Stock Exchange (KSE), by removing withholding tax (WHT) on brokers’ commission and freezing current rate of Capital Gain Tax (CGT) till June 2014.

Addressing KSE members, he said that CGT was an important tax which was imposed on short term gains despite its opposition from KSE members.

“I accept these proposals from the SECP,” he said amid applause from KSE members. He also ordered that the proposals be operationalised by April 1.

Earlier, Chairman SECP Muhammad Ali in his speech said that the burden of CGT had pulled down the market capitalization of KSE from $75 billion to $33 billion, thus wiping out $42 billion from the market.

Imposing of CGT had affected investors’ confidence and brokers’ capacity to do business and created a liquidity crunch in the market, he added.

Brokers welcome removal of WHT, freezing of CGT rates

Leading market players welcomed the decision to remove WHT on broker’s commission and freezing of current CGT rates on securities trading till June 2014.

Responding to the finance minister’s decision of accepting proposals of SECP to enhance trade volumes in the stock market, a leading broker Aqeel Karim Dedhi said that it will increase the volume ten times.

This is a good move which will enhance the confidence of the investors in the market and bring in more investment into market, he added.

He said the impact of this decision will be witnessed in the market from next Monday.

AKD said that volumes had dropped to lowest levels due to levy of CGT and double taxation in the form of withholding tax.

Another leading broker Arif Habib said WHT was a double taxation and it was the public demand to remove it.

“We are now at par with other commodity markets in the country,” he said.

Habib added that trade volumes would surge to 200 million from next week and would gradually go up. He hoped that new investment would come to the market after the freezing of CGT.
Title: Re: CGT -- Capital Gains Tax
Post by: msypk on January 21, 2012, 10:57:21 PM
fridays rumor was that CGT will be abolished,doesn't seem the case though
Title: Re: CGT -- Capital Gains Tax
Post by: kamal on January 21, 2012, 11:05:44 PM
As per me, what i have gone through the SECP proposal as posted by Farzooq igues on 15 January. Following are highlighted points and opinions. (bare in mind that Hafeez have said that he accepted all the proposals from Secp and KSe.) so means that the 15th January Posts related proposals are accepted.

Now following are vital.

1- Before 2010, we at KSE as Individual or Company or even as broker only gave gain tax @ flat 10% under PTR (presumptive tax regime) and bfore that there was not tax. PTR means that full and final a tax is deducted on a income earned on the sale of sucurities by any of the party i.e. indiv, Co, or  a broker. Once its taxed than same should not be taxed again.

2- Than Post 2010 came the CGT Rules and linking of Section 111 and 233 A with It. Actually it was more related to documentation of Big fishes at KSE. Total CGT has 3 parts a- Capital Gain, B- Section 111 of ITO and Section 233 A relating to advance tax on members of KSE relating to all activities they perform at KSE.

Now as far as Capital Gain is concern, it was changed from PTR to NTR i.e Normal Tax Regime with Separte Block of income to be taxed at separte rates specified in the Shedules of ITO. Since its not any more PTR means that its income is not finally taxed and would be taxed accordingly at specific rates. Flat 10% was broken with holding period. i.e. of 6 months and 1 year and so on.

Now we as individual at that point of time have to determine Capital Gain earned from 2010 i.,e after PTR and than as per rates specified it should be taxed and should be adequately disclosed in return of income. If Not adequately disclosed than Section 111 misrepresentation of assets or un explained assets of a person would come intact. This section is very strict and its the last net / Jaal in the ITO.takai Tax Payers bach kai ja na payay. Remember Co's and Brokers are also traders as we are so for this purpose they also came in the same legal requirement. Non compliance with Section 111 could lead to severve implications as per ITO.

Actually jab PTR main Capital Gain tha tau the deducting authority decuted the tax and ap tax jama karwa chukay thay tau return main bharay ya nae bharay govt ko koi issue nahee tha But Short Cut Aziz Mind tactfully 1st identified kai PTRs sai kitna Capital Gain tax jama hota hai than Deduction and payt of Cap Gain tax ka onus shifted again to the Investors (Co. Indiv. Broker). Yeh Kaam isnay Rental Income pai bhee kia hai. Tax Tax net main pehlay un disclosed people kau lao than documentation karwao.

Now Situation aisscc hogayee kai Hum Capital Gain (actual) jama nad disclose bhee karain and if not than non compliance with Section 111. 111 kai powers ki basis pai FBR nai KSE and SECP sai last five years kai sale records of shres bhee mangay thay 1 months ago. Ispai Market acted negatively.

3- Section 233A. Actually Sari Kasar idhar nikal diee gayee hai. As per this section the KSE would collect from Member of KSE i.e broker advance tax (jo kai pehlay minimum and ussay bhee pehlay PTR tha) on every form of their income was collected  at rates specificed in ITO and deposit to GOVT. This was serious nail in the Cofin. Further 233A was also linked with 111. Now imagine Broker Capital Gain Tax bhee daiga, Commission and Brokerage pai bhee advance tax daiga, COT pai bhee tax daige; All trades of the Broekrs pai tax laiga i.e. Purchase and Sale sabb pai and non compliance with any one of them 111 on hojata hai and uski non compliance TAX defulter Category main laiayagee. So on.

So now Secp proposes that

1- Capital Gain tax rakhay wont be PTR. NTR hee rahay ga. It would be at rates as specified or to be specified with Caping of rate. haan Magar now section 111 and section 233 A are deferred till Jan 2014 i mean thier applicability. Tau Brokers tau khush.

Keep in mind tax kai amount pai kabhee bhee kisi kau itna masla nahee jitna 111 and 233A and Return kai sections sai hai. I mean disclosing ur wealth. Kiunkai Stock main paisa aiya tau kahee sai tau app lai Hongay.

New proviso would be built co confirm that no assessment orders would be issued by commissioners in respect of their powers of Section 122 onwards where they can call anny person to disclose that they have not breached 111. Further There will be no audit Orders, Assessment Orders in respect of 111 and 233A. Huge Relief.

NCCPL will collect the tax and deposit (mechanism remained un explianed) haan par NCCPL would provide month wise report to SECP and FBR of each investors.NCCPL would be Witholding Agent. It will issue certificate to Investor on yearly basis. Based on this info Investor would file return and declare the amount already deducted by NCCPL and deposit the return to FBR. Investor of Any kind would be exempt from maintaining record of CGT deducted by the NCCPL and certificate would be final one. FBR wont ask question bus jitna NCCPL nai kata utna batana hai. This willhelp govt and fbr for regular flow of money in form of tax.

ITs sort of PTR wale kahanee now.

Summing Up. CGT kabhee issue tha hee nahee. FED, CGT, CVT no issue. Documentation was the key. Now Brokers are relieved aik tau 233A defer hoagaya hai Tau unko TAX on taxes and thier activities nahee daina Sirf CGT daina hai. Unsai bhee NCCPL would collect.

SO to me that Positive and Great news. Be ready for Rocket jumps from Monday. Haan Humaray haan Rumurs bohat hotee hai. Shaid Full Clarifications annay tak Market Cautious rahay. New Ammendments would be from April 2011. Ussay pehlay tak kai and APRIL kai badd sai bhee 111 ki requirement and audits and assessment orders khatam.

My Review over it. ;)
Title: Re: CGT -- Capital Gains Tax
Post by: kamal on January 21, 2012, 11:07:57 PM
WHT on brokers’ commission removed, CGT rates frozen
 APP
(1 hour ago) Today
Finance Minister Dr Abdul Hafeez Shaikh.—File Photo

KARACHI: Finance Minister Dr Abdul Hafeez Shaikh on Saturday agreed to the proposals of Securities Exchange Commission of Pakistan (SECP) for increasing trade volumes at the Karachi Stock Exchange (KSE), by removing withholding tax (WHT) on brokers’ commission and freezing current rate of Capital Gain Tax (CGT) till June 2014.

Addressing KSE members, he said that CGT was an important tax which was imposed on short term gains despite its opposition from KSE members.

“I accept these proposals from the SECP,” he said amid applause from KSE members. He also ordered that the proposals be operationalised by April 1.

Earlier, Chairman SECP Muhammad Ali in his speech said that the burden of CGT had pulled down the market capitalization of KSE from $75 billion to $33 billion, thus wiping out $42 billion from the market.

Imposing of CGT had affected investors’ confidence and brokers’ capacity to do business and created a liquidity crunch in the market, he added.

Brokers welcome removal of WHT, freezing of CGT rates

Leading market players welcomed the decision to remove WHT on broker’s commission and freezing of current CGT rates on securities trading till June 2014.

Responding to the finance minister’s decision of accepting proposals of SECP to enhance trade volumes in the stock market, a leading broker Aqeel Karim Dedhi said that it will increase the volume ten times.

This is a good move which will enhance the confidence of the investors in the market and bring in more investment into market, he added.

He said the impact of this decision will be witnessed in the market from next Monday.

AKD said that volumes had dropped to lowest levels due to levy of CGT and double taxation in the form of withholding tax.

Another leading broker Arif Habib said WHT was a double taxation and it was the public demand to remove it.

“We are now at par with other commodity markets in the country,” he said.

Habib added that trade volumes would surge to 200 million from next week and would gradually go up. He hoped that new investment would come to the market after the freezing of CGT.


Yup So be Ready for that. ITs great news even if CGT is not removed. :biggrin:
Title: Re: CGT -- Capital Gains Tax
Post by: imran.hafeez on January 21, 2012, 11:12:30 PM
When SECP sent the proposal to FBR, it was clear that Presumptive Tax Regime is a history and now SECP/KSE is looking for a middle ground.

On friday rumor was that proposal has been accepted.

There was no such rumor that CGT has been excempted or abolished.
Title: Re: CGT -- Capital Gains Tax
Post by: kamal on January 21, 2012, 11:15:57 PM
When SECP sent the proposal to FBR, it was clear that Presumptive Tax Regime is a history and now SECP/KSE is looking for a middle ground.

On friday rumor was that proposal has been accepted.

There was no such rumor that CGT has been excempted or abolished.

Cmon CGT ki market main news thee khatam honay ki.
Title: Re: CGT -- Capital Gains Tax
Post by: blue chip on January 22, 2012, 10:49:37 AM
When SECP sent the proposal to FBR, it was clear that Presumptive Tax Regime is a history and now SECP/KSE is looking for a middle ground.

On friday rumor was that proposal has been accepted.

There was no such rumor that CGT has been excempted or abolished.

Cmon CGT ki market main news thee khatam honay ki.

kamal sb lagta hai kuch buy nai huwa app ne ................kamal sb wake up its a big big news.....market can even add more den 2000 points frm here.......dynamics will entirely changed now ...u will c da price discovery now volumes will b huge which leads to price discovery multiple will b more den 10 atleast..................... 
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on January 22, 2012, 11:09:44 AM

Government decision to attract more investors
 January 22, 2012
RECORDER REPORT

 The government decision to approve all SECP proposals is expected to attract more investors and to increase trading activities at the stock markets, analysts said.

They said the imposition of capital gains tax and its mode of collection had affected investor interest badly and the average daily trade had declined drastically at 10-year lowest levels.


The participation of retail investors having their share of over 50 percent in the daily trading activities remained extremely low since the imposition of capital gains tax, they mentioned.

"The taxation measures approved by the Finance Minister will provide life to a dead market," Muhammad Sohail, leading analyst and former member director at Karachi Stock Exchange board said.

"The market volumes that fell to 10-year lowest level after imposition of capital gains tax would improve," he said.

"A vibrant capital market will help in new listings, capital formation and privatisation," he added.

The benchmark KSE-100 index had already registered healthy gains of 865 points during the last six sessions on investors' expectations over the acceptance of SECP proposals and tax amnesty.

Trading activities on the local bourse also increased significantly as the volumes on Friday stood at 178 million shares as compared to an average daily trade of around 30 million shares during the last many months
Title: Re: CGT -- Capital Gains Tax
Post by: Poker Face on January 22, 2012, 12:34:18 PM
And I think no declaration of assets till June 2014 as well. And NCCPL will collect automatically collect CGT instead of filing by investors.
Please clarify 
Title: Re: CGT -- Capital Gains Tax
Post by: blue chip on January 22, 2012, 01:09:37 PM
And I think no declaration of assets till June 2014 as well. And NCCPL will collect automatically collect CGT instead of filing by investors.
Please clarify

y all dis applicable frm 1st April y not frm 2marrow....wat if dis govt will not stay for another 2 months????????????
Title: Re: CGT -- Capital Gains Tax
Post by: Poker Face on January 22, 2012, 01:12:08 PM
And I think no declaration of assets till June 2014 as well. And NCCPL will collect automatically collect CGT instead of filing by investors.
Please clarify
no question to be raised over source of income invested in equities till 2014, afterwards, the wealth tax to be treated as white (genuine). NCCPL to deduct cgt to avoid a direct contact of investor with income tax officer.
Title: Re: CGT -- Capital Gains Tax
Post by: imran.hafeez on January 22, 2012, 01:15:29 PM
Because systems have to be developed at NCCPL end to implement this deduction.

Thats why they have taken 2 months time.

And I think no declaration of assets till June 2014 as well. And NCCPL will collect automatically collect CGT instead of filing by investors.
Please clarify

y all dis applicable frm 1st April y not frm 2marrow....wat if dis govt will not stay for another 2 months????????????
Title: Re: CGT -- Capital Gains Tax
Post by: Ghayyas on January 22, 2012, 01:28:52 PM
Market will rise and trading will increase manifold. This is what almost everybody is saying. My question to Farzooq, Poker Face, others is which shares do you think are expected to get significant boost? Could you please give a list of such companies/sectors? Thanks.
Title: Re: CGT -- Capital Gains Tax
Post by: imran.hafeez on January 22, 2012, 01:50:29 PM
I think POL, APL & HUBC will rise most.

POL and APL has breaked out and will now move to next levels.

HUBC has come down to a very attractive level and with approval naraowal tariff at feb end and half year dividend, it will rally.


Market will rise and trading will increase manifold. This is what almost everybody is saying. My question to Farzooq, Poker Face, others is which shares do you think are expected to get significant boost? Could you please give a list of such companies/sectors? Thanks.
Title: Re: CGT -- Capital Gains Tax
Post by: invincible on January 22, 2012, 02:09:48 PM
Its very positive development which will boost up price discovery & volumes simultaneously.    :thumbsup_anim:
Title: Re: CGT -- Capital Gains Tax
Post by: kamal on January 22, 2012, 06:46:36 PM
When SECP sent the proposal to FBR, it was clear that Presumptive Tax Regime is a history and now SECP/KSE is looking for a middle ground.

On friday rumor was that proposal has been accepted.

There was no such rumor that CGT has been excempted or abolished.



Cmon CGT ki market main news thee khatam honay ki.

kamal sb lagta hai kuch buy nai huwa app ne ................kamal sb wake up its a big big news.....market can even add more den 2000 points frm here.......dynamics will entirely changed now ...u will c da price discovery now volumes will b huge which leads to price discovery multiple will b more den 10 atleast.....................
I have 200% investment in items ;). Kachra sai laikai blue chips. Now lets c. But 1 thing for sure i wont be keeping the portfolio intact and ussay daikh kai khush hojaaon kai meray AFS portfolio mai itnay ka gain  Hai. Jahan Feel hua would dispose it off. Than take fresh position Profit nikal kai i mean cost main rehkai hee khelna hai. Waisay Dear My above statement was based on the fact that friday kau i heard kai people says CGT abolishment / exemption. It is not abolished not exempted. I am looking forward for FFC 200 FFBL 60 NRL 300 MCB 200 ENGRO 120-130's (007  ;)) etc. Tomorrow sai Bull with Horns and without ropes. Inshallah sab kai saat acha hoga.
Title: Re: CGT -- Capital Gains Tax
Post by: Ghayyas on January 22, 2012, 07:23:22 PM
When SECP sent the proposal to FBR, it was clear that Presumptive Tax Regime is a history and now SECP/KSE is looking for a middle ground.

On friday rumor was that proposal has been accepted.

There was no such rumor that CGT has been excempted or abolished.



Cmon CGT ki market main news thee khatam honay ki.

kamal sb lagta hai kuch buy nai huwa app ne ................kamal sb wake up its a big big news.....market can even add more den 2000 points frm here.......dynamics will entirely changed now ...u will c da price discovery now volumes will b huge which leads to price discovery multiple will b more den 10 atleast.....................
I have 200% investment in items ;). Kachra sai laikai blue chips. Now lets c. But 1 thing for sure i wont be keeping the portfolio intact and ussay daikh kai khush hojaaon kai meray AFS portfolio mai itnay ka gain  Hai. Jahan Feel hua would dispose it off. Than take fresh position Profit nikal kai i mean cost main rehkai hee khelna hai. Waisay Dear My above statement was based on the fact that friday kau i heard kai people says CGT abolishment / exemption. It is not abolished not exempted. I am looking forward for FFC 200 FFBL 60 NRL 300 MCB 200 ENGRO 120-130's (007  ;)) etc. Tomorrow sai Bull with Horns and without ropes. Inshallah sab kai saat acha hoga.

I dont see FFC, FFBL, MCB, etc. touching that high. May be I am wrong but country's political and economic conditions are not favourable. My advice is to book profit every 2nd day.
Title: Re: CGT -- Capital Gains Tax
Post by: 007 on January 22, 2012, 07:42:25 PM
yes it that is the case plus the annual results will create some excitement as well blue chips all the way every one will be higher
Title: Re: CGT -- Capital Gains Tax
Post by: AGz on January 23, 2012, 10:13:48 AM
yes it that is the case plus the annual results will create some excitement as well blue chips all the way every one will be higher

@007 your Engro is going to take a flight. I hope this will remove your loss factor  :thumbsup_anim:
Title: Re: CGT -- Capital Gains Tax
Post by: kamal on January 23, 2012, 10:43:16 AM
Makt May touch 150
Title: Re: CGT -- Capital Gains Tax
Post by: 007 on January 23, 2012, 11:11:11 AM
yes it that is the case plus the annual results will create some excitement as well blue chips all the way every one will be higher

@007 your Engro is going to take a flight. I hope this will remove your loss factor  :thumbsup_anim:

thanks
Title: Re: CGT -- Capital Gains Tax
Post by: ShaikhKhan on January 23, 2012, 12:27:21 PM

What level you people think market would touch in next 15 days?????
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on February 09, 2012, 10:06:34 AM

FBR agreed to all proposals on CGT: SECP chief
 February 09, 2012
SOHAIL SARFRAZ
0 Comments

 The Chairman of Securities and Exchange Commission of Pakistan (SECP), Muhammad Ali, categorically said on Wednesday that the Federal Board of Revenue (FBR) has agreed to all proposals of the SECP on capital gain tax (CGT), and revision in the CGT regime cannot be used for whitening the illegal money by making investment in the stock markets.


Sharing latest update on the proposed CGT mechanism of the SECP, he told media here on Wednesday that the revised CGT regime could not be used for whitening illegal money of stock market investors.

Only legal money made during CGT exemption period of the last 36 years would be facilitated to be brought in to the stock market up to 2014.

Strongly dispelling the impression of illegal investment in the market, the SECP Chairman clarified that there is no chance of investment of illegal money in the stock exchanges due to stringent requirements following effective customer due diligence/know your customer policies in the capital markets.

Even if section 111 of Income Tax Ordinance, 2001, requiring unexplained income or assets would be deferred for funds invested in capital markets till June 30, 2014, but laws of other enforcement agencies like FIA, NAB would be used to check any kind of investment on the apprehensions of illegal money.

He said that during finalising the revision in CGT regime, major concerns have been addressed.

Although investors would be exempted from explaining source of investment under section 111 of the Income Tax Ordinance, 2001, the provisions of the laws of the National Accountability Bureau (NAB), Anti-Narcotics Force (ANF), Federal Investigation Agency and other national institutions would continue to apply on the source of investment.

Muhammad Ali explained in detail three CGT-related concerns highlighted by media, including investment of illegal money in stock market, people may use CGT scheme for whitening of illegal money, and exemption from source of investment could lead to illegal money coming to the market.

Clarifying these concerns, the SECP Chairman said that measures that have been taken to address these issues include that there would be complete due diligence of the investors, and last week the SECP had tightened its procedures in this regard.

He ruled out any chance of misuse of the scheme for whitening illegal money through revised CGT regime and said that minimum holding period, which could be 3 months to 6 months, would address this issues and there would be more risk in minimum holding period for the investors in stock market than investment in other instruments available for whitening the illegal money.

Why anybody would come to stock market to legalise black money in the presence of cheap instruments used for legalisation of the undisclosed and unexplained investments? There are easy ways available to the public to legalise money on mere payment of 2 percent of the amount, like prize bonds, etc.

In the presence of such instruments, there is no need for any person to come to the stock market for legalisation of illegal money where high risk is involved in capital market investment.

In a certain withholding period of shares at stock market, the value of shares may go up or down involving high risk for the investors.

Due to involvement of price risk factor why any investor would use the channel of stock market for whitening the money in the presence of other options available for this purpose, the SECP Chairman further explained.

When asked how the SECP would encourage documentation while availing exemption from disclosing source of investment in stock market under section 111 of the Ordinance 2001, he responded that the exemption from section 111 of the Income Tax Ordinance 2001 would be available up to June 30, 2014.

After this period, source of investment would be probed by the tax department under the new CGT scheme.

Muhammad Ali said that the exemption from the CGT was available to the investors for the last 36 years, and investors have earned profits and created wealth from the earnings of investment in stocks.

Billions of rupees made during these 36 years from stock market were legal.

However, these have not been documented and new CGT regime would help document it for the first time.

The wealth created by the stock market investors was legal and official because there was no CGT applicable in the past.

The wealth was legal but not documented in the books of income tax department.

The investors did not declare this wealth in their income tax returns.

Neither the investors knew to file their income tax returns in the past nor did tax department pursue the investors to submit the returns.

The investors have not cancelled their wealth but they were not asked to file their income tax returns.

When asked about FBR's objection on declaring NCCPL as withholding agent, the SECP Chairman said that the FBR has no objection on declaring National Clearing Company of Pakistan (NCCPL) as a withholding agent to deduct and deposit the CGT from investors' transactions.

The FBR is not opposing proposal of working of NCCPL as withholding agent.

The SECP and the FBR are closing working for the finalisation of the CGT scheme to achieve four major objectives ie documentation of economy, broadening the tax base and expanding the tax net, generation of maximum revenue, and revival of capital markets.

The implementation date of the new scheme is April 2012.

In this connection, there is no need to go to the Parliament for revising the CGT collection procedure.

The FBR will amend the Income Tax Rules on CGT to introduce all necessary changes required for making the new system operational.

For declaring the NCCPL as withholding agent, this could be done through an Ordinance.

There would be also requirement of amendments in the NCCPL regulations for withholding and deduction of the due amount of tax by NCCPL being withholding agent.

There is also a need to change the systems of the NCCPL for implementation of the whole scheme for deduction and deposit of the due amount of tax.

To simplify calculation and achieve smooth implementation of CGT, the SECP has proposed to freeze the CGT rate at existing levels.

Any further amendment in the Income Tax Ordinance 2001 for freezing the CGT rates up to June 30, 2014 could be done through Finance Act 2012 onwards.

He further said that the revision in CGT regime has been fully endorsed by the FBR as it has been finalised in consultation with its top officials and it would help documentation of money invested in stock market, help stop tax avoidance and tax evasion.



Explaining the functioning of the new system of the CGT, the SECP Chairman further elaborated that the taxpayers would be required to file income tax returns under the new scheme and the deducted tax would be dully reflected in the returns.

The SECP has further proposed that NCCPL shall act as a withholding agent to deduct and deposit the CGT from investors' transactions.

The NCCPL shall also provide investor-wise monthly report of CGT deducted and deposited for each investor to FBR and issue a certificate to the investor of the amount deducted.

The investor will file tax return, including the CGT deposited, based on the certificate provided by NCCPL.

The NCCPL would be declared as withholding agent to document all transactions of stock market for the CGT purposes.

In this way, all investments of the stock market would be documented for the FBR.

No investor can escape from the system of the NCCPL and this would be the most appropriate way to deduct tax on all stock market transactions.

When asked about the status of withholding tax on stock market transactions, Muhammad Ali said that the withholding tax would be abolished under the new scheme as tax would be collected on profit and not on transactions.

In other words, the transaction-based tax would not be applicable under the new CGT regime.

Following imposition of the CGT on stock market, the tax collection from stock market has been drastically reduced from Rs 4-5 billion per annum to only Rs 300 million.

During the last three years, the stock market has been destroyed and investors are not interested in making investment in capital market due to sudden imposition of the CGT.

The listing of new companies on the stock exchanges has also been decreased due to the CGT.

The announcement of the Minister of Finance on the CGT at Karachi had a positive impact on the market and the trading volume has started increasing at the stock exchanges.

The SECP wanted to place a CGT collection system which would ensure increase in trading volumes without comprising revenue collection, the SECP Chairman explained.

He further highlighted that when CDC account would be opened, all bank requirements would apply on such account, and there is no logic in fearing that illegal money would come into the stock market.

He also dispelled the impression that revision in CGT regime would negate any proposal of Financial Action Task Force of the Anti-Money Laundering, and said that as a safeguard, all proposals of FATF have been made part of the revised scheme.

The SECP Chairman explained that all transactions recorded by the National Clearing Agency would help stop tax evasion and tax avoidance.

The CGT would be applicable on profit only as against the earlier practice of profit and loss both.

It has been proposed that the rate of tax shall be 10 percent on capital gains arising on securities held for a period up to six months, and 8 percent on capital gain arising on securities held for a period above six months to one year for investments made in the stock markets up to 2014.

He said that before imposition of CGT, tax collection from stock market was Rs 5 billion.

That has came down to Rs 300-400 million.

The revision in CGT regime would help bring in huge investment back into the stock market and this would help document the wealth, broaden the tax base, and increase in the tax proceeds.

The major target that would be achieved through this revision in CGT regime is to revive the stock market, and help businesses to arrange capital required for their growth.

The average turnover of the stock market has declined after imposition of the CGT and there is an effort to get it back to its earlier turnover.

Some 500 million shares were traded in the stock market at the time when market was performing well and now these volumes have declined to 150 million shares.

The SECP wants to bring the volume back to 500 million shares, or even higher, and this would result in higher tax collection from stock market.

He said that imposing minimum tax on money earned from other sectors, if invested in stock market after the revision of CGT regime, would make investors stay away from the market.

He also said that placing any kind of cap on such kind of investment in stock market would be against the spirit of the stock market.

Explaining the reason for introducing revised CGT regime from April 1, 2012, the SECP Chairman said that SECP, FBR and NCA have to revise their rules and regulations and these could be revised and implemented during a transition period of the last three months of the ongoing fiscal year (2011-12).
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on February 10, 2012, 09:24:27 AM

Proposed CGT regime: FBR critical of section 111 exemption, NCCPL role
 February 10, 2012
SOHAIL SARFRAZ

 The Federal Board of Revenue will convey its strong reservations over the proposed regime of capital gains tax (CGT) to the Ministry of Finance on two key issues - exemption from section 111 (unexplained income or assets) of the Income Tax Ordinance 2001 to investment made in stock market upto June 30, 2014 and declaring National Clearing Company of Pakistan (NCCPL) as a withholding agent to deduct and deposit the CGT from investors.


Sources told Business Recorder here on Thursday that the FBR will submit a detailed note to the Ministry of Finance on its viewpoint on the most important issues of the proposed regime of the CGT.

The legal, technical and financial implications of the proposed CGT regime would be clarified to the Ministry of Finance.

In this connection, the FBR is convening regular meetings with the high-ups of the Finance Ministry.

Firstly, it has been reported that the exemption from section 111 of the Income Tax Ordinance 2001 would be available up to June 30, 2014.

After this period, source of investment would be probed by the tax department under the new CGT scheme.

On this proposal, the FBR has opposed the idea of granting exemption from section 111 of the Income Tax Ordinance 2001 up to June 30, 2014.

The FBR is not in favour of giving any exemption from disclosing source of investment made in future by the investors of the stock exchanges.

Even exemption from disclosing source of investment made in the past should only be available to those having genuine investments in stock market.

The FBR has opposed any blanket exemption to the investors of stock market from the provisions of section 111 of the Income Tax Ordinance 2001.

Secondly, the FBR will have to first study the systems of the (NCCPL) before declaring it as withholding agent.

In this connection, a senior official of Inland Revenue Service will visit Karachi on Monday (February 13) to study the system of the NCCPL.

So far, the FBR opposed the proposal of declaring (NCCPL) as a withholding agent to deduct and deposit the CGT from investors of stock exchanges.

The FBR is not ready to give any kind of assessment powers to the NCCPL.

If the government wanted to declare the NCCPL as withholding agent, the FBR is also not in favour of giving any assessment powers to the NCCPL.

The right of assessment should remain with the Inland Revenue Service officers under the Income Tax Ordinance 2001 and such assessment powers cannot be given to any withholding agent of the CGT.

However, the FBR has to first analyse the systems of the NCCPL before giving its final proposal on declaring it as withholding agent.

Under the proposed CGT regime, it has been proposed that NCCPL shall act as a withholding agent to deduct and deposit the CGT from investors' transactions.

The NCCPL shall also provide investor-wise monthly report of CGT deducted and deposited for each investor to FBR and issue a certificate to the investor of the amount deducted.

The investor will file tax return, including the CGT deposited, based on the certificate provided by NCCPL
Title: Re: CGT -- Capital Gains Tax
Post by: Ghayyas on February 12, 2012, 11:39:20 AM
http://www.brecorder.com/top-news/1-front-top-news/45487-senate-elections-hafeez-dropped-from-final-list-of-candidates-.html

If Hafeez Shaikh goes, what will happen to the CGT reforms that he announced recently? I think in that case we will have a new finance minister.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on February 13, 2012, 09:47:42 AM

IRS official to visit KSE, NCCPL on February 14
 February 13, 2012
RECORDER REPORT

 A senior official of Inland Revenue Service (IRS) will visit Karachi Stock Exchange (KSE) and National Clearing Company of Pakistan (NCCPL) at Karachi on Tuesday (February 14) to practically study the system of the NCCPL before declaring it as withholding agent to deduct and deposit the capital gains tax (CGT) from investors of stock exchanges.


Sources told Business Recorder here on Sunday that the Securities and Exchange Commission of Pakistan (SECP) and NCCPL have finalised all arrangements to give a detailed briefing to the FBR official for practical demonstration of the transactions taking place at the NCCPL.

In this connection, the SECP/NCCPL officials would explain the whole system of stock market transactions and proposed mechanism for deduction of tax by the NCCPL being withholding agent.

The SECP/NCCPL officials would also highlight the proposed system of deduction of tax on the stock market transactions for better understanding of the tax official.

It would be explained that how the tax would be automatically be deducted under the automated procedures of the NCCPL.

The queries raised by the tax official would be dully clarified for timely implementation of the new system.

Once the tax official would analyze and endorse the new system of the NCCPL, the SECP/NCCPL would finally devise and implement the system.

However, it is only possible after certification of the new system of tax deduction by the FBR.

Following clearance from the FBR, the SECP and the NCCPL would finalise the system in the light of legal viewpoint and guidelines of the tax authorities.

According to sources, at present the CGT Rules of the FBR have covered certain types of transactions for collection of the CGT on stock market investment.

Under the revised regime of the CGT, SECP would ensure to deduct and collect tax on all kinds of transactions of capital market to ensure deduction and maximum collection of the CGT.

The new system will be made in line with the recommendations made by the FBR.

The relevant rules will be framed as per definitions and legal framework being provided by the FBR to ensure that all relevant capital market transactions be covered under the proposed system on the CGT.

If the FBR wanted to include or exclude some kind of transactions from the purview of the new regime, it would be accepted by the SECP and the new system would be implemented in line with the FBR's guidelines on the new system
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on February 15, 2012, 08:54:37 AM
NCCPL’s system vital for computing CGT


KARACHI: A senior official of the Federal Board of Revenue (FBR) visited the National Clearing Company of Pakistan Limited (NCCPL) to study NCCPL’s systems and mechanism being deployed for computing and deducting the capital gains tax (CGT). The visit has been a consequent step to the Finance Minister’s approval to the SECP proposal on revamping CGT that was submitted to the FBR last month.
During the presentation, NCCL briefed FBR on it’s IT-intensive set-up that will allow system based computation of CGT without human involvement. Under the proposed mechanism, the NCCPL will compute and deduct CGT for every investor by constructing an inventory portfolio based on its unique identification number. Both market-based transactions executed through stock exchanges and the Central Depository System will be used for computation of CGT liability in accordance with the Income Tax Ordinance and Rules. The NCCPL will forward to FBR its proposal in relation to required regulatory amendments to give effect to the overall CGT scheme.
In terms of the proposal to provide ease of calculation and documentation to individual investors, the NCCPL will act as a withholding agent to deduct and deposit the CGT from investors’ transactions. staff report
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on February 25, 2012, 09:36:29 AM
Govt to withdraw amnesty for stock market
By Our Correspondent
Published: February 25, 2012

 In February, the FBR has so far collected Rs93 billion and needs another Rs43 billion in the remaining period to achieve the monthly tax target.

ISLAMABAD: The government has decided to withdraw the exemption granted to stock investors from disclosing the source of income as well as remove the freeze on rates of capital gains tax, sources say.
 
Both the decisions were taken here on Friday in a meeting of the Tax Reforms Coordination Group (TRCG), headed by Adviser to Prime Minister on Finance, Dr Abdul Hafeez Shaikh.
 
Officials of the Federal Board of Revenue (FBR), Securities and Exchange Commission of Pakistan (SECP) and members of TRCG attended the meeting.
 
Sources told The Express Tribune that the government decided that no amnesty would be granted in violation of rules. According to the FBR, the proposed amnesty scheme for stock investors violated existing income tax laws. Either the laws would have to be amended or the announcement would have to be taken back, was the suggestion given to Shaikh by FBR officials, sources said.
 
On a visit to the Karachi stock market about a month ago, Shaikh announced the amnesty scheme and also froze CGT rates at existing 7.5 per cent and 10 per cent for next two years. The SECP had floated these proposals in an effort to revive the stock market.
 
According to the announcement made on January 21, the government would not ask for the source of income from capital market investors by the end of 2014, thereafter that wealth would be treated as ‘white’. The government also abolished withholding tax on sale of shares and kept CGT rate at 7.5 per cent on sale of shares after six months, but before one year of purchase and 10 per cent on sale before six months of purchase. The decisions had to take effect from April 1.
 
According to the Money Bill 2010, from July 2012 the CGT on sale of shares before six months will be 12.5 per cent, and after six months it will be 10 per cent.
 
Proponents of the amnesty scheme, led by the SECP, argue that since the imposition of CGT on stock investments, the collection of taxes has come down to a mere Rs400 million from Rs5 billion annually, while daily trading volume has dipped to 150 million shares from 450 million shares.
 
However, the amnesty sparked concerns that it may violate the Anti-Money Laundering Act and people could walk away by legalising ill-gotten money.
 
FBR spokesperson neither confirmed nor denied the development in Friday’s meeting.
 
“SECP has no comments on whether the decision has been reversed,” said Ahmer Shamsi, an official of SECP’s media wing.
 
However, according to a handout of the FBR, the TRCG discussed proposed changes in implementation of CGT aimed at simplifying the mechanism, improving enforcement and broadening the tax base. The committee formed an implementation group consisting of TRCG members, FBR officials and SECP representatives to ensure implementation in line with the law, it added.
 
Title: Re: CGT -- Capital Gains Tax
Post by: M&M on February 25, 2012, 10:13:21 AM
Govt to withdraw amnesty for stock market
By Our Correspondent
Published: February 25, 2012

 In February, the FBR has so far collected Rs93 billion and needs another Rs43 billion in the remaining period to achieve the monthly tax target.

ISLAMABAD: The government has decided to withdraw the exemption granted to stock investors from disclosing the source of income as well as remove the freeze on rates of capital gains tax, sources say.
 
Both the decisions were taken here on Friday in a meeting of the Tax Reforms Coordination Group (TRCG), headed by Adviser to Prime Minister on Finance, Dr Abdul Hafeez Shaikh.
 
Officials of the Federal Board of Revenue (FBR), Securities and Exchange Commission of Pakistan (SECP) and members of TRCG attended the meeting.
 
Sources told The Express Tribune that the government decided that no amnesty would be granted in violation of rules. According to the FBR, the proposed amnesty scheme for stock investors violated existing income tax laws. Either the laws would have to be amended or the announcement would have to be taken back, was the suggestion given to Shaikh by FBR officials, sources said.
 
On a visit to the Karachi stock market about a month ago, Shaikh announced the amnesty scheme and also froze CGT rates at existing 7.5 per cent and 10 per cent for next two years. The SECP had floated these proposals in an effort to revive the stock market.
 
According to the announcement made on January 21, the government would not ask for the source of income from capital market investors by the end of 2014, thereafter that wealth would be treated as ‘white’. The government also abolished withholding tax on sale of shares and kept CGT rate at 7.5 per cent on sale of shares after six months, but before one year of purchase and 10 per cent on sale before six months of purchase. The decisions had to take effect from April 1.
 
According to the Money Bill 2010, from July 2012 the CGT on sale of shares before six months will be 12.5 per cent, and after six months it will be 10 per cent.
 
Proponents of the amnesty scheme, led by the SECP, argue that since the imposition of CGT on stock investments, the collection of taxes has come down to a mere Rs400 million from Rs5 billion annually, while daily trading volume has dipped to 150 million shares from 450 million shares.
 
However, the amnesty sparked concerns that it may violate the Anti-Money Laundering Act and people could walk away by legalising ill-gotten money.
 
FBR spokesperson neither confirmed nor denied the development in Friday’s meeting.
 
“SECP has no comments on whether the decision has been reversed,” said Ahmer Shamsi, an official of SECP’s media wing.
 
However, according to a handout of the FBR, the TRCG discussed proposed changes in implementation of CGT aimed at simplifying the mechanism, improving enforcement and broadening the tax base. The committee formed an implementation group consisting of TRCG members, FBR officials and SECP representatives to ensure implementation in line with the law, it added.
 


 :shock:
Title: Re: CGT -- Capital Gains Tax
Post by: malikk on February 25, 2012, 10:56:57 AM
Govt to withdraw amnesty for stock market
By Our Correspondent
Published: February 25, 2012

 In February, the FBR has so far collected Rs93 billion and needs another Rs43 billion in the remaining period to achieve the monthly tax target.

ISLAMABAD: The government has decided to withdraw the exemption granted to stock investors from disclosing the source of income as well as remove the freeze on rates of capital gains tax, sources say.
 
Both the decisions were taken here on Friday in a meeting of the Tax Reforms Coordination Group (TRCG), headed by Adviser to Prime Minister on Finance, Dr Abdul Hafeez Shaikh.
 
Officials of the Federal Board of Revenue (FBR), Securities and Exchange Commission of Pakistan (SECP) and members of TRCG attended the meeting.
 
Sources told The Express Tribune that the government decided that no amnesty would be granted in violation of rules. According to the FBR, the proposed amnesty scheme for stock investors violated existing income tax laws. Either the laws would have to be amended or the announcement would have to be taken back, was the suggestion given to Shaikh by FBR officials, sources said.
 
On a visit to the Karachi stock market about a month ago, Shaikh announced the amnesty scheme and also froze CGT rates at existing 7.5 per cent and 10 per cent for next two years. The SECP had floated these proposals in an effort to revive the stock market.
 
According to the announcement made on January 21, the government would not ask for the source of income from capital market investors by the end of 2014, thereafter that wealth would be treated as ‘white’. The government also abolished withholding tax on sale of shares and kept CGT rate at 7.5 per cent on sale of shares after six months, but before one year of purchase and 10 per cent on sale before six months of purchase. The decisions had to take effect from April 1.
 
According to the Money Bill 2010, from July 2012 the CGT on sale of shares before six months will be 12.5 per cent, and after six months it will be 10 per cent.
 
Proponents of the amnesty scheme, led by the SECP, argue that since the imposition of CGT on stock investments, the collection of taxes has come down to a mere Rs400 million from Rs5 billion annually, while daily trading volume has dipped to 150 million shares from 450 million shares.
 
However, the amnesty sparked concerns that it may violate the Anti-Money Laundering Act and people could walk away by legalising ill-gotten money.
 
FBR spokesperson neither confirmed nor denied the development in Friday’s meeting.
 
“SECP has no comments on whether the decision has been reversed,” said Ahmer Shamsi, an official of SECP’s media wing.
 
However, according to a handout of the FBR, the TRCG discussed proposed changes in implementation of CGT aimed at simplifying the mechanism, improving enforcement and broadening the tax base. The committee formed an implementation group consisting of TRCG members, FBR officials and SECP representatives to ensure implementation in line with the law, it added.
 


 :shock:
:brickwall:  :brickwall: :bangin:
Title: Re: CGT -- Capital Gains Tax
Post by: mra901 on February 25, 2012, 10:59:10 AM
correction is due
but not in this way  :smilestar: :smilestar:
Title: Re: CGT -- Capital Gains Tax
Post by: M&M on February 25, 2012, 11:02:19 AM
Proposed changes in revised CGT regime: TRCG forms 'Implementation Group'
February 25, 2012
SOHAIL SARFRAZ
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Business Recorder Logo Tax Reform Co-ordination Group (TRCG) discussed the idea of introducing a new Eighth Schedule in the Income Tax Ordinance 2001 through a Presidential Ordinance to cover all Capital Gains Tax (CGT) related issues under a separate Schedule and proposed a minimum holding period of 120 days for investment made in stock market.

After the conclusion of the daylong meeting of the TRGC headed by Advisor to the Prime Minister on Finance Dr Abdul Hafeez Shaikh here on Friday, sources told Business Recorder that the TRGC constituted an 'Implementation Group' headed by Shahid Hussain Asad, FBR Member Inland Revenue.

The 'Implementation Group' would comprise TRCG members, FBR officials and SECP representatives to ensure implementation of the proposed changes in the revised CGT regime.

According to sources, it was discussed during the TRCG meeting that an Eighth Schedule be introduced in the Income Tax Ordinance 2001 to deal with all CGT related issues.

Presently, the Income Tax Ordinance 2001 comprises seven Schedules and any new schedule for CGT would be Eight Schedule of the Income Tax Ordinance 2001.

In case Eight Schedule is introduced in the Ordinance, it would be done through a Presidential Ordinance.

Later, the new Schedule would be made part of the Income Tax Ordinance 2001 through Finance Act.

The new regime of CGT will be applicable from April 1, 2012.

Another proposal was discussed to issue SRO for issuing revised CGT regime.

It was also discussed to introduce minimum holding period of 120 days for investors of stock market.

The minimum holding period may remain applicable for a period of two years.

In this regard, the 'Implementation Group' would work out modalities for implementation of the proposal.

As per the proposal, the source of investment may not be asked from investors who would make investment for at least minimum holding period of 120 days.

The tax department may seek details of investment in cases where investment has been made less than the minimum holding period of 120 days.

The minimum holding period has been proposed to avoid money laundering.

The role of National Clearing Company of Pakistan (NCCPL) for deduction and depositing of tax from investors' transactions was also discussed during the TRCG meeting.

The NCCPL deposits the deducted amount of the CGT in the relevant branch of the National Bank of Pakistan, sources maintained.

The members of the TRCG also discussed the idea of introducing some kind of minimum tax on creation of assets.

In this regard, different members gave their proposals on the minimum tax to be imposed on assets created in future.

It was discussed that there is creation of wealth in the country and if the wealth has been used for acquiring new assets, it may be subjected to minimum tax.

About the upcoming budget (2012-13), Hafeez Shaikh gave a broader guideline to the TRCG on the new budget.

The Advisor to the PM on Finance said that no new tax would be imposed in the coming budget and political persons, who are not paying tax, would be brought into the tax net.

It is not the government policy to impose new taxes or increase the tax rates, but the customs duties have already been brought down in last budget.

The guiding principal of the new budget would remain the same as of previous fiscal year that the general public would not be burdened with taxes and taxes should be paid by those persons who are creating wealth but not operating under the tax net.

The burden of taxes should be reduced on the masses and potential persons should be brought into the documented regime.

Instead of burdening the existing taxpayers, the government would focus on those persons, who are not paying taxes.

Meanwhile, a press release issued by the FBR said: A day-long meeting of Tax Reform Co-ordination Group (TRCG) was held on February 24, 2012 under the Chairmanship of Advisor to the Prime Minister on Finance and Revenue, Dr Hafeez Shaikh.

The TRCG members who attended the meeting included Deputy Chairman Planning Commission, Dr Nadeem-ul-haq, Chairman, SECP Muhammad Ali, Tax Reform Core Group Members Abdullah Yusuf, Arshad Zuberi, Shabbar Zaidi, Ashfaq Tola, Ali Jameel Yousuf and Mohammad Arshad Chaudhry.

During the meeting, FBR performance was reviewed and budget proposals were deliberated on.

The Group recommended that the tax base be broadened, documentation increased and gradual shift from presumptive tax regime with increase in rate for presumptive tax regime towards eventual reduction in tax rate under normal tax regime.

TRCG discussed proposed changes in implementation of Capital Gain Tax aimed at simplifying the mechanism, improvement in its enforcement and broadening of the tax base.

The Committee formed an 'Implementation Group' consisting of TRCG members, FBR officials and SECP representatives to ensure implementation in line with the law.

Revenue performance of FBR was also reviewed in detail.

Chairman FBR, Mumtaz Haider Rizvi, apprised the Group of the taxes collected under various heads and administrative measures taken till date and the way forward for the remainder of financial year 2012.

The TRCG was apprised that up to February 22, the collection stood at Rs 1068 billion, which is 26 percent higher than the collection of Rs 847 billion in the corresponding period of the previous fiscal year.

Earlier, Dr Hafeez Shaikh, while addressing the meeting, said that the guiding principles of the forthcoming Federal Budget should be to continue with the approach of simplification of taxes, avoidance of increase in taxes or the rates of taxes, fiscal incentives for growth and generation of investment and employment.

He emphasised the need for an accelerated drive for direct tax collection while providing relief for the existing taxpaying citizens.

The meeting was also attended by Dr Amna Khalifa and members of the Board, Sardar Aminullah Khan, Member (Enforcement & Accounting), Shahid Hussain Asad, Member (IR), Riffat Shaheen Qazi, Member (FATE), Azra Mujtaba, Member (SP&S), Mohammad Raza Baqir, member (Admn), Hafiz Mohammad Anees, Member (Taxpayer Audit), Mohammad Nisar, Chief Collector (North), Humayun Khan Skindari, DG (PCA), Shahid Rahim Shekh, Additional Secretary, Revenue Division and Imtiaz Ahmad, GM PRAL.

Source:
BR (http://www.brecorder.com/top-stories/0:/1158932:proposed-changes-in-revised-cgt-regime-trcg-forms-implementation-group/?date=2012-02-25)
Title: Re: CGT -- Capital Gains Tax
Post by: buy.high.sell.low on February 25, 2012, 11:03:02 AM
o crap :shock:
Title: Re: CGT -- Capital Gains Tax
Post by: M&M on February 25, 2012, 11:05:49 AM
i think it's common sense that any relieve given has to be in accordance with the law
tribune reporter 'headline' gave a 'headache'
bottomline: no inquiry on source of income for those who hold for 4 months
share other conclusions .. ?
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on February 25, 2012, 11:25:50 AM
Govt to withdraw amnesty for stock market

ISLAMABAD: The government has decided to withdraw the exemption granted to stock investors from disclosing the source of income as well as remove the freeze on rates of capital gains tax, sources say.
 
Sources told The Express Tribune that the government decided that no amnesty would be granted in violation of rules. According to the FBR, the proposed amnesty scheme for stock investors violated existing income tax laws. Either the laws would have to be amended or the announcement would have to be taken back, was the suggestion given to Shaikh by FBR officials, sources said.
 
However, the amnesty sparked concerns that it may violate the Anti-Money Laundering Act and people could walk away by legalising ill-gotten money.
 
FBR spokesperson neither confirmed nor denied the development in Friday’s meeting.
 
“SECP has no comments on whether the decision has been reversed,” said Ahmer Shamsi, an official of SECP’s media wing
.
 
However, according to a handout of the FBR, the TRCG discussed proposed changes in implementation of CGT aimed at simplifying the mechanism, improving enforcement and broadening the tax base. The committee formed an implementation group consisting of TRCG members, FBR officials and SECP representatives to ensure implementation in line with the law, it added.

i think it's common sense that any relieve given has to be in accordance with the law
tribune reporter 'headline' gave a 'headache'
bottomline: no inquiry on source of income for those who hold for 4 months
share other conclusions .. ?

Andar se kuch khabrain aa rahi hain aur handout kuch keh raha hai
nothing but confusion and uncertainity
Title: Re: CGT -- Capital Gains Tax
Post by: Big Broker on February 25, 2012, 11:29:38 AM
and market loves uncertainty.   :rtfm:
Title: Re: CGT -- Capital Gains Tax
Post by: imran.hafeez on February 25, 2012, 01:04:17 PM
What they mean by holding period? Buying a share and not selling it for 4 months or putting money in broker account and not withdrawing it for 4 months?
Title: Re: CGT -- Capital Gains Tax
Post by: M&M on February 25, 2012, 03:16:41 PM
What they mean by holding period? Buying a share and not selling it for 4 months or putting money in broker account and not withdrawing it for 4 months?
difficult to tell before official clarity but former seems more practical although the latter would be good for market sentiment
Title: Re: CGT -- Capital Gains Tax
Post by: imran.hafeez on February 25, 2012, 03:19:27 PM
I think later would be more revelant.

Because all the changes in the CGT regime were made for the retail investor.

And retail investor is basically a day trader and cant wait for 4 months to sell his/her shares

What they mean by holding period? Buying a share and not selling it for 4 months or putting money in broker account and not withdrawing it for 4 months?
difficult to tell before official clarity but former seems more practical although the latter would be good for market sentiment
Title: Re: CGT -- Capital Gains Tax
Post by: imran.hafeez on February 25, 2012, 03:21:50 PM
Market wanted to change CGT to presumtive tax regime, which never happened.

What actually happened was nondisclosure of source of income and no dealing with income tax officials.

And this incentive brought back the volumes and excitement to the market.

Now this very incentive is under risk.
Title: Re: CGT -- Capital Gains Tax
Post by: M&M on February 25, 2012, 03:37:19 PM
your arguments are valid
Title: Re: CGT -- Capital Gains Tax
Post by: mshakilsadiq on February 25, 2012, 04:16:30 PM
What a great incentive? Get wealth by selling narcotics, looting the wealth holding people on gun point, looting the banks; all this money is 'Black'. Put this money in KSE for 4 months (it is not the question weather it is kept in broker's account or used to buy & sell shares) it will become 'White'. What a great laundry?
In spite of discourging this 'cleaning' we promote it. How we are projecting our country in the international society? What a logic behind it? KSE-100 index and volume are increasing. For a little benefit we are ready to pay very high price.
Title: Re: CGT -- Capital Gains Tax
Post by: Ghayyas on February 25, 2012, 04:55:13 PM
What a great incentive? Get wealth by selling narcotics, looting the wealth holding people on gun point, looting the banks; all this money is 'Black'. Put this money in KSE for 4 months (it is not the question weather it is kept in broker's account or used to buy & sell shares) it will become 'White'. What a great laundry?
In spite of discourging this 'cleaning' we promote it. How we are projecting our country in the international society? What a logic behind it? KSE-100 index and volume are increasing. For a little benefit we are ready to pay very high price.
Agreed Sir.
Title: Re: CGT -- Capital Gains Tax
Post by: zahidsharif151 on February 25, 2012, 05:04:32 PM
with due respect, I do not think so, Black Money means the money on which you do not pay taxes, it may be right means but if you do not disclose to the tax authorities then it is black.
Title: Re: CGT -- Capital Gains Tax
Post by: mshakilsadiq on February 25, 2012, 06:08:23 PM
What a great incentive? Get wealth by selling narcotics, looting the wealth holding people on gun point, looting the banks; all this money is 'Black'. Put this money in KSE for 4 months (it is not the question weather it is kept in broker's account or used to buy & sell shares) it will become 'White'. What a great laundry?
In spite of discourging this 'cleaning' we promote it. How we are projecting our country in the international society? What a logic behind it? KSE-100 index and volume are increasing. For a little benefit we are ready to pay very high price.
Agreed Sir.

Thank you.
I forgot to mention some other means of black money; these are kick backs (commissions) in different deals between government officials and respective dealers, contractors, companies; also bribe for postings of incompetent persons (Number of such cases are before the higher courts). It looks to be more NRO Part-2. They want to use KSE for their vested interest. Now they only want to formulate the modalities, how to get benefit of this idea? They are limiting minimum for 4 months and hopefully this is the remaining age of this " Mofahmat Mafia". Because of FBR it is difficult to issue SRO therefore they are discussing about presidential ordinance. After this honeymoon, I am not sure that iterim government will certify it. But I am sure present govt will give this indemnity for 6 months under the ordinance. Hopefully it will be challanged in the court and till the court decide it invalid, black will be white, out from KSE. We should make effort to understand "The Business Mind" of the government.
Let's see.
Title: Re: CGT -- Capital Gains Tax
Post by: Irfankhan on February 25, 2012, 06:34:35 PM
What a great incentive? Get wealth by selling narcotics, looting the wealth holding people on gun point, looting the banks; all this money is 'Black'. Put this money in KSE for 4 months (it is not the question weather it is kept in broker's account or used to buy & sell shares) it will become 'White'. What a great laundry?
In spite of discourging this 'cleaning' we promote it. How we are projecting our country in the international society? What a logic behind it? KSE-100 index and volume are increasing. For a little benefit we are ready to pay very high price.
Agreed Sir.
I am sorry i donot agree with you. although i am not in favour of laundring but do you remember we are in Pakistan and majority of money of pakistani ...... are in abroad in dollars. dont you think its safe if it floats here rather tobe with USA and they hold it for good? i think its good it comes here and poor people can get benefit by industry or whatever but i dont think its a good idea that billions of dollars sitting around the world of pakistani should sit with them. if they are black then too it should come back. this is only my views.  we cannot hold the people from doing wrong mind it plz.  any comments highly appreciated.
Title: Re: CGT -- Capital Gains Tax
Post by: Irfankhan on February 25, 2012, 06:37:50 PM
What a great incentive? Get wealth by selling narcotics, looting the wealth holding people on gun point, looting the banks; all this money is 'Black'. Put this money in KSE for 4 months (it is not the question weather it is kept in broker's account or used to buy & sell shares) it will become 'White'. What a great laundry?
In spite of discourging this 'cleaning' we promote it. How we are projecting our country in the international society? What a logic behind it? KSE-100 index and volume are increasing. For a little benefit we are ready to pay very high price.
Agreed Sir.

Thank you.
I forgot to mention some other means of black money; these are kick backs (commissions) in different deals between government officials and respective dealers, contractors, companies; also bribe for postings of incompetent persons (Number of such cases are before the higher courts). It looks to be more NRO Part-2. They want to use KSE for their vested interest. Now they only want to formulate the modalities, how to get benefit of this idea? They are limiting minimum for 4 months and hopefully this is the remaining age of this " Mofahmat Mafia". Because of FBR it is difficult to issue SRO therefore they are discussing about presidential ordinance. After this honeymoon, I am not sure that iterim government will certify it. But I am sure present govt will give this indemnity for 6 months under the ordinance. Hopefully it will be challanged in the court and till the court decide it invalid, black will be white, out from KSE. We should make effort to understand "The Business Mind" of the government.
Let's see.
Here i totally agree brother. but remember we have to take money back from big boys they will not give if they dont feel comfirtable. if the comfirtability is not there. all this kb etc. will also be at USA for good. no benefits for PK then.
Title: Re: CGT -- Capital Gains Tax
Post by: blue chip on February 25, 2012, 08:46:45 PM
In yesterdays meeting of Tax Reforms coordination group (TRCG), I understand it was decided to grant the immunity inspire of some reservations from FBR- A presidential ordinance will be issued before end of march to provide full legal cover. A new 8th schedule will be added to income tax ord 2001 to regulate tax regime for stock exchange and capital gains arising from stocks and grant immunity.

Every body enjoy ur weekend every thing is ok smooth n calm....big big news for market
Title: Re: CGT -- Capital Gains Tax
Post by: msypk on February 25, 2012, 09:22:46 PM
In yesterdays meeting of Tax Reforms coordination group (TRCG), I understand it was decided to grant the immunity inspire of some reservations from FBR- A presidential ordinance will be issued before end of march to provide full legal cover. A new 8th schedule will be added to income tax ord 2001 to regulate tax regime for stock exchange and capital gains arising from stocks and grant immunity.

Every body enjoy ur weekend every thing is ok smooth n calm....big big news for market

is it just yr understanding or there is some concerete info behind it
Title: Re: CGT -- Capital Gains Tax
Post by: mshakilsadiq on February 25, 2012, 09:26:09 PM
In yesterdays meeting of Tax Reforms coordination group (TRCG), I understand it was decided to grant the immunity inspire of some reservations from FBR- A presidential ordinance will be issued before end of march to provide full legal cover. A new 8th schedule will be added to income tax ord 2001 to regulate tax regime for stock exchange and capital gains arising from stocks and grant immunity.

Every body enjoy ur weekend every thing is ok smooth n calm....big big news for market
Thank you for such nice information but so far neither SECP authorities nor finance ministry has issue any clear statement. If they are sincere to the KSE investors they must speak out what is going on? If they don't make a public statement till tomorrow means they want to keep the fear and panic alive. Why?
Title: Re: CGT -- Capital Gains Tax
Post by: blue chip on February 25, 2012, 09:50:02 PM
In yesterdays meeting of Tax Reforms coordination group (TRCG), I understand it was decided to grant the immunity inspire of some reservations from FBR- A presidential ordinance will be issued before end of march to provide full legal cover. A new 8th schedule will be added to income tax ord 2001 to regulate tax regime for stock exchange and capital gains arising from stocks and grant immunity.

Every body enjoy ur weekend every thing is ok smooth n calm....big big news for market

is it just yr understanding or there is some concerete info behind it


dats not my statement....dats da news
Title: Re: CGT -- Capital Gains Tax
Post by: kamal on February 25, 2012, 10:49:25 PM
In yesterdays meeting of Tax Reforms coordination group (TRCG), I understand it was decided to grant the immunity inspire of some reservations from FBR- A presidential ordinance will be issued before end of march to provide full legal cover. A new 8th schedule will be added to income tax ord 2001 to regulate tax regime for stock exchange and capital gains arising from stocks and grant immunity.

Every body enjoy ur weekend every thing is ok smooth n calm....big big news for market



is it just yr understanding or there is some concerete info behind it


dats not my statement....dats da news

Yeh mujhay tau tension hoagee tyhee unread posts parh kai .. indeed there were some confusion but isnt it defused???

I think PM also directed Hafeez Sheikh to not to impose any burden  / more tax (new tax) in this budget. Coz its Govt last budget and its awam dost budget ... FBR kuch bhee kahay .. Govt wont let down ..Business Community ...Further Interest rrate down, CGT factor etc. .. ka drama karnay ki kia zarroorat thee jab implement nahee karana .. Wats good abt this govt kai yeh namumkin kau bhee mumkin kar saktay hain :biggthumpup:
Title: Re: CGT -- Capital Gains Tax
Post by: malikk on February 25, 2012, 11:01:05 PM
In yesterdays meeting of Tax Reforms coordination group (TRCG), I understand it was decided to grant the immunity inspire of some reservations from FBR- A presidential ordinance will be issued before end of march to provide full legal cover. A new 8th schedule will be added to income tax ord 2001 to regulate tax regime for stock exchange and capital gains arising from stocks and grant immunity.

Every body enjoy ur weekend every thing is ok smooth n calm....big big news for market
is it just yr understanding or there is some concerete info behind it
dats not my statement....dats da news

Yeh mujhay tau tension hoagee tyhee unread posts parh kai .. indeed there were some confusion but isnt it defused???

I think PM also directed Hafeez Sheikh to not to impose any burden  / more tax (new tax) in this budget. Coz its Govt last budget and its awam dost budget ... FBR kuch bhee kahay .. Govt wont let down ..Business Community ...Further Interest rrate down, CGT factor etc. .. ka drama karnay ki kia zarroorat thee jab implement nahee karana .. Wats good abt this govt kai yeh namumkin kau bhee mumkin kar saktay hain :biggthumpup:
hahahaha ... black n white ka tu nahi pata .. lekin apnay white ko double "Red n White"kerny ka time aaraha hai  :thumbsup_anim:
Title: Re: CGT -- Capital Gains Tax
Post by: kamal on February 25, 2012, 11:06:06 PM
In yesterdays meeting of Tax Reforms coordination group (TRCG), I understand it was decided to grant the immunity inspire of some reservations from FBR- A presidential ordinance will be issued before end of march to provide full legal cover. A new 8th schedule will be added to income tax ord 2001 to regulate tax regime for stock exchange and capital gains arising from stocks and grant immunity.

Every body enjoy ur weekend every thing is ok smooth n calm....big big news for market
is it just yr understanding or there is some concerete info behind it
dats not my statement....dats da news

Yeh mujhay tau tension hoagee tyhee unread posts parh kai .. indeed there were some confusion but isnt it defused???

I think PM also directed Hafeez Sheikh to not to impose any burden  / more tax (new tax) in this budget. Coz its Govt last budget and its awam dost budget ... FBR kuch bhee kahay .. Govt wont let down ..Business Community ...Further Interest rrate down, CGT factor etc. .. ka drama karnay ki kia zarroorat thee jab implement nahee karana .. Wats good abt this govt kai yeh namumkin kau bhee mumkin kar saktay hain :biggthumpup:
hahahaha ... black n white ka tu nahi pata .. lekin apnay white ko double "Red n White"kerny ka time aaraha hai  :thumbsup_anim:

Actually ...sahee kar rahee hai Govt PEMRA kai throgh zara media kau control kia jana chiay .. Bila wajah ki news... :biggthumpup: :biggthumpup:

Apna white tau nahee red hee tha ..uskau mazeed red karnay sai roka ja sakta hai .. Waisay preopen would tell us the story ..

Inshallah Monday tuesday kau proper circular aiyga .. :biggthumpup: for amnesty.. :fingerscrossed1:
Title: Re: CGT -- Capital Gains Tax
Post by: stockz_123 on February 25, 2012, 11:40:02 PM
In yesterdays meeting of Tax Reforms coordination group (TRCG), I understand it was decided to grant the immunity inspire of some reservations from FBR- A presidential ordinance will be issued before end of march to provide full legal cover. A new 8th schedule will be added to income tax ord 2001 to regulate tax regime for stock exchange and capital gains arising from stocks and grant immunity.

Every body enjoy ur weekend every thing is ok smooth n calm....big big news for market

is it just yr understanding or there is some concerete info behind it


dats not my statement....dats da news


 :biggthumpup:
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on February 26, 2012, 11:29:47 AM

'Fresh amnesty scheme to send 'wrong signals' to honest taxpayers'
 February 26, 2012
RECORDER REPORT

 Some members of the Tax Reform Co-ordination Group (TRCG) have strongly opposed the amnesty schemes, which discourage the compliant taxpayers-who are regularly paying taxes.

Sources told Business Recorder, here on Saturday that the issue of the amnesty schemes came to the light during the last meeting of the TRGC headed by Advisor to the Prime Minister on Finance Dr Abdul Hafeez Shaikh at the FBR House.


It was discussed that the amnesty schemes either for claimants of illegal sales tax adjustments etc would not encourage the compliant taxpayers.

The government has to give due consideration to the aspect of tax payments made by the compliant taxpayers before announcing any kind of amnesty scheme for any specific sector etc.

During the meeting, amnesty schemes for stock investors and illegal input tax adjustments were discussed.


Some members believed that the compliant taxpayers have been engaged in regular filing of their tax returns and payments of taxes.

If the government gives any kind of amnesty for non-compliant taxpayers or habitual defaulters, it would put the compliant taxpayers at a disadvantageous position.

Therefore, there should not be any kind of free hand amnesty scheme for anyone.

Such free hand amnesty schemes only discourages taxpayers who are paying taxes, but giving incentives to the tax evaders would only encourage people for not paying taxes.

Sources said that in some of the best tax administrations, there is no amnesty for payment of penalty/fine.

However, only amnesty from imprisonment has been given to the tax evaders.

The FBR had rejected proposal to grant fresh amnesty to tax defaulters and decided to recover over Rs 80 billion from claimants of the illegal input adjustments of sales tax.

The decision was taken in the last FBR's Commissioners' Conference to pursue the cases of tax defaulters as any fresh amnesty scheme would give 'wrong signals' to honest taxpayers.

When contacted, a tax expert said that the launching of such scheme for claimants of illegal adjustments would give a wrong message to the business community that the FBR is not distinguishing between the honest taxpayers and tax evaders.

If we give such kind of amnesty to the tax evaders, it would discourage the honest taxpayers to regularly pay taxes.

The tax dodgers and the taxpayers should not be treated equally, sources said.

In the present circumstances, there is no intention of the tax authorities to launch amnesty schemes for those involved in mega sales tax scam, he added.
Title: Re: CGT -- Capital Gains Tax
Post by: invincible on February 26, 2012, 12:43:42 PM
Its too confusing to comprehend  :down:.

OMG I have just gone through last two pages.  :arrowhead:

Whats going to happen-- Major correction?  :skepti
Title: Re: CGT -- Capital Gains Tax
Post by: tariqhafeez on February 26, 2012, 12:54:11 PM
This kind of noise is expected from FBR as they continue to  face difficult task to secure the target revenue.  The noise will remain noise as there is little odds of CGT implementation in near future specially when General Elections are near.
Title: Re: CGT -- Capital Gains Tax
Post by: invincible on February 26, 2012, 01:07:47 PM
This kind of noise is expected from FBR as they continue to  face difficult task to secure the target revenue.  The noise will remain noise as there is little odds of CGT implementation in near future specially when General Elections are near.

Elections will be held in OCT- NOV.  We cant trade in state of uncertainty till Budget. I think, major-correction is unavoidable if this report shifts into reality.
Title: Re: CGT -- Capital Gains Tax
Post by: stockz_123 on February 26, 2012, 01:19:56 PM
This kind of noise is expected from FBR as they continue to  face difficult task to secure the target revenue.  The noise will remain noise as there is little odds of CGT implementation in near future specially when General Elections are near.

Elections will be held in OCT- NOV.  We cant trade in state of uncertainty till Budget. I think, major-correction is unavoidable if this report shifts into reality.

well you guys should stop propagation to disseminate panic.
Title: Re: CGT -- Capital Gains Tax
Post by: BullsBears on February 26, 2012, 04:42:24 PM
i agree. Funds, institutions and Big Bs are not a much of retards to take the market to a new 48 month high unless something concrete is in the pipeline. It takes a lot of liquidity to take the mkt to these new highs and no matter what the rumor mill churns out, this rodeo of bulls will go on.

Rem on golden rule, janta is mostly out of the market so i need to say no more.
Title: Re: CGT -- Capital Gains Tax
Post by: msypk on February 26, 2012, 06:01:33 PM
everyone seems to be expressing their hopes ,no solid info been shared especially after todays business recorder news.it seems to be conforming the tribune article.any factual info will be appreciated .
Title: Re: CGT -- Capital Gains Tax
Post by: imran.hafeez on February 26, 2012, 07:28:46 PM
Todays business recorder report nowhere says that source of income excemption has been withdrawn.

It says that amensty was criticized but not taken for stock investors.

For me monday is positive, because market is assuming that SRO for CGT will be released soon after fridays meeting

everyone seems to be expressing their hopes ,no solid info been shared especially after todays business recorder news.it seems to be conforming the tribune article.any factual info will be appreciated .
Title: Re: CGT -- Capital Gains Tax
Post by: stockz_123 on February 26, 2012, 07:32:28 PM
Todays business recorder report nowhere says that source of income excemption has been withdrawn.

It says that amensty was criticized but not taken for stock investors.

For me monday is positive, because market is assuming that SRO for CGT will be released soon after fridays meeting

everyone seems to be expressing their hopes ,no solid info been shared especially after todays business recorder news.it seems to be conforming the tribune article.any factual info will be appreciated .

correctly said :biggthumpup:
Title: Re: CGT -- Capital Gains Tax
Post by: AGz on February 27, 2012, 11:18:34 AM
Vague and ambiguous are both news and dhiyan.

No clear statement made yet. Although, tax and accountability should be done as it's a vital element of any economy. Just for the sake of clusters of small funds why let go the big fishes. And whoever say that money should be brought back by offering them comfort. They'll come and go taking away even the leftovers of your investments before you could even know.

It's the game of power whether its money or seat. Believe me, nothing is going to hurt anyone. Just wait and watch out for the confirmation. Just trade as you trade or hold on to the strong scrips at lower possible rates, its not much of an issue for general trader until and unless it follows the trail of a big fish. Cause if a big fish takes a hard turn or puts on its brake shoes, the followers will be the one badly hurt. Use your judgment and analysis.

That's all I got to say.
Title: Re: CGT -- Capital Gains Tax
Post by: mshakilsadiq on February 27, 2012, 12:23:45 PM
Vague and ambiguous are both news and dhiyan.

No clear statement made yet. Although, tax and accountability should be done as it's a vital element of any economy. Just for the sake of clusters of small funds why let go the big fishes. And whoever say that money should be brought back by offering them comfort. They'll come and go taking away even the leftovers of your investments before you could even know.

It's the game of power whether its money or seat. Believe me, nothing is going to hurt anyone. Just wait and watch out for the confirmation. Just trade as you trade or hold on to the strong scrips at lower possible rates, its not much of an issue for general trader until and unless it follows the trail of a big fish. Cause if a big fish takes a hard turn or puts on its brake shoes, the followers will be the one badly hurt. Use your judgment and analysis.

That's all I got to say.

Agreed
Title: Re: CGT -- Capital Gains Tax
Post by: kamal on February 27, 2012, 12:27:17 PM
Vague and ambiguous are both news and dhiyan.

No clear statement made yet. Although, tax and accountability should be done as it's a vital element of any economy. Just for the sake of clusters of small funds why let go the big fishes. And whoever say that money should be brought back by offering them comfort. They'll come and go taking away even the leftovers of your investments before you could even know.

It's the game of power whether its money or seat. Believe me, nothing is going to hurt anyone. Just wait and watch out for the confirmation. Just trade as you trade or hold on to the strong scrips at lower possible rates, its not much of an issue for general trader until and unless it follows the trail of a big fish. Cause if a big fish takes a hard turn or puts on its brake shoes, the followers will be the one badly hurt. Use your judgment and analysis.

That's all I got to say.

Agreed

Market Although freezed as far as index volatility is concerned. .vol is ok ...Fear Factor maal chutwana hai... Inshallah all will be better ..Thora bhee negative outlook hota tau tday it could be atleast 100 negative. ..from outset ..
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on February 27, 2012, 04:13:18 PM
120day Minimum Holding Period for new CGT regime

During the meeting on Friday, with FBR being vocal about the unfair amnesties, the Tax Reform Coordination Group (TRCG) discussed the way out for the proposed changes put forwarded by the SECP and accepted by the Ministry of Finance (MoF) earlier. As per reports and discussions with the stakeholders, TRCG was learnt to have proposed a constitutional way to implement the changes in the CGT regime; ann introduction of the Eighth Schedule to be introduced/added to the Income Tax Ordinance 2001 to handle all the CGT-related issues, foremost is the shunning of the investigation of the Source of Income of stock investors till 2014. The additional Schedule was thought to be easily done through a Presidential Order which, later on, would become essential part of the Ordinance through the Finance Act. Though the amended Ordinance was thought to be readied before the Apr’01, 2012 deadline earmarked for the changed CGT regime, the implementation of the proposed act is expected to effectively take place not earlier than the announcement of the upcoming budget (amid Senate elections in Mar’12) while Apr’01, 2012 is expected to only entail commencement of the auto-deduction of CGT through the NCCPL. As far as changes in CGT-rate regime were concerned, to freeze CGT rate, the SRO (Statutory Regulatory Order) in this regard was expected to be released this week, which would provide further confidence to market participants about the implementation of the said proposals. A new proposal of Minimum Holding Period (MHP) of 120 days for investors was also discussed that was meant to discourage money laundering (investors taking out money before MHP may face source of income investigation). If implemented, this would raise few eyebrows while trading in the capital market may be affected in the short term again.   

investcap
Title: Re: CGT -- Capital Gains Tax
Post by: imran.hafeez on February 27, 2012, 04:38:02 PM
This is good. Because previously we were interpreting Minimum Holding period as that one cannot sell the share for at least 4 months.

But it actually meant that one shall not withdraw money before 120 days.

And most importantly it was proposed, not accepted by the TRCG.


120day Minimum Holding Period for new CGT regime

During the meeting on Friday, with FBR being vocal about the unfair amnesties, the Tax Reform Coordination Group (TRCG) discussed the way out for the proposed changes put forwarded by the SECP and accepted by the Ministry of Finance (MoF) earlier. As per reports and discussions with the stakeholders, TRCG was learnt to have proposed a constitutional way to implement the changes in the CGT regime; ann introduction of the Eighth Schedule to be introduced/added to the Income Tax Ordinance 2001 to handle all the CGT-related issues, foremost is the shunning of the investigation of the Source of Income of stock investors till 2014. The additional Schedule was thought to be easily done through a Presidential Order which, later on, would become essential part of the Ordinance through the Finance Act. Though the amended Ordinance was thought to be readied before the Apr’01, 2012 deadline earmarked for the changed CGT regime, the implementation of the proposed act is expected to effectively take place not earlier than the announcement of the upcoming budget (amid Senate elections in Mar’12) while Apr’01, 2012 is expected to only entail commencement of the auto-deduction of CGT through the NCCPL. As far as changes in CGT-rate regime were concerned, to freeze CGT rate, the SRO (Statutory Regulatory Order) in this regard was expected to be released this week, which would provide further confidence to market participants about the implementation of the said proposals. A new proposal of Minimum Holding Period (MHP) of 120 days for investors was also discussed that was meant to discourage money laundering (investors taking out money before MHP may face source of income investigation). If implemented, this would raise few eyebrows while trading in the capital market may be affected in the short term again.   

investcap
Title: Re: CGT -- Capital Gains Tax
Post by: stockz_123 on February 27, 2012, 08:41:03 PM
very much illogical...
Title: Re: CGT -- Capital Gains Tax
Post by: M&M on February 28, 2012, 02:52:14 PM
Chairman SECP M.Ali confirmed in AAJ KAMRAN KHAN Ke SAATH , the implementation of SRO will be in effect wrt 1st Apr 12 , after working certain modalities in march ... and looking forward for a positive change ..  :goodc:

Ya i have listened that too ..

120 days ki baat yeh hai kai jisnay 120 days kai liay rakha ussay jama karana paray ga ..yanee satta on hai ..Khareedo becho becho khareedo ...Kiun bhaee ? what i heard ... :biggthumpup: :biggthumpup:

http://youtu.be/6pWdMkcu6Qw
yeah, looks like this 120 days rule is crafted to encourage daytrading/turnover only
i understood the 120day thing a little differently - what i got was that your gains and subsequent capital would only be considered to be official/white if between now (1April2012) and June2014 you maintain your investment for a minimum of 120 days.

how would that encourage turnover or day trading as you guys put it?

exactly i took it same as u said....
actually i'm not conflicting .. liquidity and white money are different issue .. in addition to what you have understood
words from 5:40
'if u're invested in any 120 days out of 365+365 days (2 years), only then it will be officially documented/registered' and source of income may be asked from that investor .. so basically if i buy and sell in a single day it won't be counted as 1 day and hence won't get officially put (120 days of daytrading), so no inquiry and consequently more daily liquidity.
Title: Re: CGT -- Capital Gains Tax
Post by: stockz_123 on February 28, 2012, 02:57:07 PM
Chairman SECP M.Ali confirmed in AAJ KAMRAN KHAN Ke SAATH , the implementation of SRO will be in effect wrt 1st Apr 12 , after working certain modalities in march ... and looking forward for a positive change ..  :goodc:

Ya i have listened that too ..

120 days ki baat yeh hai kai jisnay 120 days kai liay rakha ussay jama karana paray ga ..yanee satta on hai ..Khareedo becho becho khareedo ...Kiun bhaee ? what i heard ... :biggthumpup: :biggthumpup:

http://youtu.be/6pWdMkcu6Qw
yeah, looks like this 120 days rule is crafted to encourage daytrading/turnover only
i understood the 120day thing a little differently - what i got was that your gains and subsequent capital would only be considered to be official/white if between now (1April2012) and June2014 you maintain your investment for a minimum of 120 days.

how would that encourage turnover or day trading as you guys put it?

exactly i took it same as u said....
actually i'm not conflicting .. liquidity and white money are different issue .. in addition to what you have understood
words from 5:40
'if u're invested in any 120 days out of 365+365 days (2 years), only then it will be officially documented/registered' and source of income may be asked from that investor .. so basically if i buy and sell in a single day it won't be counted as 1 day and hence won't get officially put (120 days of daytrading), so no inquiry and consequently more daily liquidity.

this means person holding more then 120days would b asked source of income? so investment discouraged n day trading encouraged? strange....
Title: Re: CGT -- Capital Gains Tax
Post by: kamal on February 28, 2012, 03:00:43 PM
Chairman SECP M.Ali confirmed in AAJ KAMRAN KHAN Ke SAATH , the implementation of SRO will be in effect wrt 1st Apr 12 , after working certain modalities in march ... and looking forward for a positive change ..  :goodc:

Ya i have listened that too ..

120 days ki baat yeh hai kai jisnay 120 days kai liay rakha ussay jama karana paray ga ..yanee satta on hai ..Khareedo becho becho khareedo ...Kiun bhaee ? what i heard ... :biggthumpup: :biggthumpup:

http://youtu.be/6pWdMkcu6Qw
yeah, looks like this 120 days rule is crafted to encourage daytrading/turnover only
i understood the 120day thing a little differently - what i got was that your gains and subsequent capital would only be considered to be official/white if between now (1April2012) and June2014 you maintain your investment for a minimum of 120 days.

how would that encourage turnover or day trading as you guys put it?

exactly i took it same as u said....
actually i'm not conflicting .. liquidity and white money are different issue .. in addition to what you have understood
words from 5:40
'if u're invested in any 120 days out of 365+365 days (2 years), only then it will be officially documented/registered' and source of income may be asked from that investor .. so basically if i buy and sell in a single day it won't be counted as 1 day and hence won't get officially put (120 days of daytrading), so no inquiry and consequently more daily liquidity.

this means person holding more then 120days would b asked source of income? so investment discouraged n day trading encouraged? strange....

Haann jee app sahee pochay ...Fundamentals ... ki mental strength nikalnee hai .. :biggthumpup:
Title: Re: CGT -- Capital Gains Tax
Post by: imran.hafeez on February 28, 2012, 03:18:01 PM

As per SECP chairman, any amount kept invested for minimum of 120 days during 2 years will be considered white and documented.

Any amount not kept for minimum of 120 days, will not be considered white and source of that income may be asked from the investor
Title: Re: CGT -- Capital Gains Tax
Post by: stockz_123 on February 28, 2012, 03:22:36 PM
Chairman SECP M.Ali confirmed in AAJ KAMRAN KHAN Ke SAATH , the implementation of SRO will be in effect wrt 1st Apr 12 , after working certain modalities in march ... and looking forward for a positive change ..  :goodc:

Ya i have listened that too ..

120 days ki baat yeh hai kai jisnay 120 days kai liay rakha ussay jama karana paray ga ..yanee satta on hai ..Khareedo becho becho khareedo ...Kiun bhaee ? what i heard ... :biggthumpup: :biggthumpup:

http://youtu.be/6pWdMkcu6Qw
yeah, looks like this 120 days rule is crafted to encourage daytrading/turnover only
i understood the 120day thing a little differently - what i got was that your gains and subsequent capital would only be considered to be official/white if between now (1April2012) and June2014 you maintain your investment for a minimum of 120 days.

how would that encourage turnover or day trading as you guys put it?

exactly i took it same as u said....
actually i'm not conflicting .. liquidity and white money are different issue .. in addition to what you have understood
words from 5:40
'if u're invested in any 120 days out of 365+365 days (2 years), only then it will be officially documented/registered' and source of income may be asked from that investor .. so basically if i buy and sell in a single day it won't be counted as 1 day and hence won't get officially put (120 days of daytrading), so no inquiry and consequently more daily liquidity.

this means person holding more then 120days would b asked source of income? so investment discouraged n day trading encouraged? strange....

Haann jee app sahee pochay ...Fundamentals ... ki mental strength nikalnee hai .. :biggthumpup:

nopes nothing like it, i think what imran says is something SECP chairman said...
Title: Re: CGT -- Capital Gains Tax
Post by: M&M on February 28, 2012, 03:30:13 PM
yeah i got it wrong .. sorry guys .. Imran is right

As per SECP chairman, any amount kept invested for minimum of 120 days during 2 years will be considered white and documented.

Any amount not kept for minimum of 120 days, will not be considered white and source of that income may be asked from the investor
that's it.

As per the proposal, the source of investment may not be asked from investors who would make investment for at least minimum holding period of 120 days.

The tax department may seek details of investment in cases where investment has been made less than the minimum holding period of 120 days.

The minimum holding period has been proposed to avoid money laundering.
Title: Re: CGT -- Capital Gains Tax
Post by: kamal on February 28, 2012, 03:32:04 PM
yaar i heard something else ... ajj dobara sunna paray ga ...

lets c..
Title: Re: CGT -- Capital Gains Tax
Post by: imran.hafeez on February 28, 2012, 03:44:35 PM
SECP chairman explaining 120 day holding in below interview to Kamran Khan

http://www.youtube.com/watch?v=6pWdMkcu6Qw&feature=youtu.be (http://www.youtube.com/watch?v=6pWdMkcu6Qw&feature=youtu.be)

yaar i heard something else ... ajj dobara sunna paray ga ...

lets c..
Title: Re: CGT -- Capital Gains Tax
Post by: kamal on February 28, 2012, 03:45:57 PM
SECP chairman explaining 120 day holding in below interview to Kamran Khan

http://www.youtube.com/watch?v=6pWdMkcu6Qw&feature=youtu.be (http://www.youtube.com/watch?v=6pWdMkcu6Qw&feature=youtu.be)

yaar i heard something else ... ajj dobara sunna paray ga ...

lets c..

yes bro will listen to it again at home ...and come back to it .
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on March 10, 2012, 10:06:51 AM
Presidential Ordinance to impose CGT from April
 Shahnawaz Akhter
 Saturday, March 10, 2012

KARACHI: A tax amnesty scheme for stock market will be implemented through presidential order from April 01, and no questions will be asked about the source of investment for the shares held for more than 120 days, said Shahid Hussain Asad, Member, Inland Revenue, Federal Board of Revenue (FBR) said on Friday.

“Eighth schedule will be introduced to Income Tax Ordinance 2001 through presidential order and investment details of share holding for more than 120 days will be not asked,” he said while talking to The News after Tax Reform Group (TRG) meeting held at Large Taxpayers Unit (LTU) Karachi.

He said that the presidential order would be effective April 01. However, said that capital value tax would also be imposed from April 01 on purchase of shares.

He said that the TRG discussed the modus operandi for implementing the Capital Gains Tax (CGT) on sale of shares.

The Member said that the amnesty had been granted to enhance the investments in the equity markets.

In the budget 2010/11 the government imposed 10 percent capital gains tax on holding of shares below six months and 7.5 percent for holding less than 12 months.

However, exemption is granted on holding shares for more than one year. The tax was not implemented due to objections raised by equity markets saying it would hamper investment in the equity markets.

Therefore, Securities Exchange Commission of Pakistan (SECP) presented recently a set of proposals to finance ministry regarding CGT, which were accepted.

The proposals accepted by the finance minister included: capping the present capital gains tax rate till 2014; tax immunity from declaring source of income till 2014; tax deduction by National Clearing Company of Pakistan (NCCPL); each stock member allowed exposure of Rs50 million; and abolishing the withholding tax.

About tax collection, he said that so far FBR collected Rs1108 billion in first eight months of current fiscal year, which is 27 percent up considering last fiscal year’s collection in the corresponding months.

“The collection pace indicates the revenue body will meet Rs1,952 billion target for FY12,” he added.

About budget proposals for 2012/2013, he said that broadening of tax base would remain focus in next fiscal year.

He said that a large number of commercial electricity consumers are out of tax net, therefore, for the next budget the withholding tax rate will be increased for this segment and the WHT will be increase from 10 percent to 25 percent.

Similarly, the FBR will propose a 5 percent withholding tax on education fees above Rs5000 payable by parents and will be adjustable. Asad said that this will help FBR to detect people who have taxable income but not in the tax net.

About the broadening the tax base drive initiated last fiscal year, he said that the FBR issued about 457,000 notices to non-taxpayers.

The FBR received 70,000 tax returns against the revenue body created demand of Rs7 billion.

“However, managed to collect Rs800 million so far,” he said and added the FBR aimed to enhance the taxpayers number to 7 million by June 30.

About corporate tax rate, he said the FBR would propose a 2-3 percent reduction in existing 35 percent corporate tax rate in the next budget.

“The corporate tax rate will be brought down 25 percent but with gradual annual reduction,” he added.

In contrast, he said that revenue body is intended to eliminate the Presumptive Tax Regime (PTR).

He said for this purpose the FBR would propose a sizeable increase in tax rate next year. “This will help in increasing corporatization,” he added.

About income tax on salaried class, he said that a change in tax rate is on the cards which will help the taxpayers in lower tax slabs.

To another query that banks had refused the FBR for sharing information of their depositors, he said under the law all the banks are bound to provide details.

“All the stakeholders, including State Bank of Pakistan (SBP) and Finance Ministry will sit together to resolve the issue so FBR can access all the data of depositors,” he added.

Highlights

¨ 5 percent WHT on education fee

¨ 25pc WHT on commercial power consumers

¨ Corporate tax rate to be slashed by 2-3pc
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on March 10, 2012, 10:07:30 AM

Capital gains tax: TRCG discusses key proposed section
 March 10, 2012
SOHAIL SARFRAZ

 Tax Reform Co-ordination 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 on Friday 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 rationalisation plan of the FBR for coming budget 2012-13, sources added
Title: Re: CGT -- Capital Gains Tax
Post by: kimz0007 on March 10, 2012, 10:11:50 AM
market may GO down now?
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on March 10, 2012, 10:12:40 AM
Govt offers scheme to whiten black money
By: Imran Ali Kundi | March 10, 2012 | 2

ISLAMABAD/KARACHI – The PPP government has offered a lucrative scheme to ‘swindlers, plunderers, smugglers and corruption monsters’ to whiten their black money, the sources said on Friday.

As per the economic observers, the plan is simple enough: invest in stocks, pay tax and get your black money legalised. This scheme  in the garb of generating more funds through levying of Capital Gains Tax on the stocks – is yet another feather in the cap of the ruling federal government, which in its four-year rule have gifted the people with an unprecedented number of huge financial and other scandals and scams.

The good luck tablet for the corruption whales will be sealed through the pen of non-other-than the president  of this one of the most corrupt states in the world  Asif Ali Zardari, who himself faces a Supreme Court order requiring the government to write to Swiss authorities for reopening graft case against him, the sources said. And this looters’ spree will effectively start from April 1 of the running year. Sources told TheNation that proposed amnesty scheme, to be brought in through a presidential ordinance, aims at attracting investment in the reeling stock markets of the country and bring revenue to the cash strapped government during remaining period (April-June) of the ongoing financial year 2011-2012.

As part of the new package, the Capital Gains Tax (CGT) would be imposed from April 1 this year with all amendments and the FBR (Federal Board of Revenue) will not ask about the source of income of any stake holder, Finance Minister Dr Abdul Hafeez Shiek announced during his visit to Karachi Stock Market on Friday.

Under the amendments agreed to by FBR Tax Reform Committee and KSE officials, anybody who holds shares and keeps them for four months, would be liable to pay CGT with 0.02 pc CVT (Capital Value Tax), sources said. If any share holder sold the shares before 120 days, he will pay the CGT and 0.01pc CVT, they added.

The CGT was imposed on stock exchanges in 2008 and as per the existing law, each stock player has to pay the 10 percent of its profit to government and is bound to give the details of his/her source of income to the Federal Board of Revenue.

Though people associated with the stock markets have welcomed the new plan, different economists have held it a recipe of economic disaster as they say it would encourage more corruption in the country. After getting this unconditional and open ‘pre-arrest bail’, the corrupt will indulge in more and more corruption thus giving a rise to an unending corruption spiral.

They said it was tantamount to giving a license to the looters, illegal arms and drug barons. They advised the government to opt for other ways for inviting investment and generating revenue.

Opposing the proposed scheme, the eminent economist and National University of Science and Technology (NUST) Business School Dean Dr Ashfaq Hassan Khan said that government is promoting the corruption in ‘legal way’. This move would open doors to corruption and so many other evils, he added.

Dr Salman Shah, former adviser on Finance and Economic Affairs, said that government should announce comprehensive tax package instead of such short-run measure for bringing new investment in the country. He further said that government should also control the sources of black money. The government should also decrease the tax rate so that tax evasion could be controlled in the country, which would help in broadening the tax base, he added.

Some other economists were of the view that such amnesty and money whitening schemes were a betrayal to and cheating with the honest taxpayers.

Title: Re: CGT -- Capital Gains Tax
Post by: imran.hafeez on March 10, 2012, 10:22:47 AM
All these news are contradictory to what secp chairman said.

According to secp chairman, ones only need to keep money invested in market for 120 days.

But above news are saying to hold share for minimum of 120 days.

Retail investors usually day trade, so they will suffer.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on March 10, 2012, 10:34:04 AM
All these news are contradictory to what secp chairman said.

According to secp chairman, ones only need to keep money invested in market for 120 days.

But above news are saying to hold share for minimum of 120 days.

Retail investors usually day trade, so they will suffer.

Agreed. there are more safer ways to whiten black money than risking money in stocks for 4 months.
Title: Re: CGT -- Capital Gains Tax
Post by: tariqhafeez on March 10, 2012, 10:46:02 AM


My view is different.  I think there is some back up plan for "BIG WIGs" to buy very good companies like State Life Insurance Corporation, FESCO , PPL, IESCO, and such other companies with BLACK MONEY.  The cost of such money is ZERO as it is looted money. The assets in PAKISTAN STOCK MARKET are so cheap.  Such holders of BLACK MONEY will not get such low priced assets. 

STATE LIFE INSURANCE CORPORATION is extremely rich company.  Will add value to stock market.  Investment will scene will change in Pakistan.  When Pakistan has to fill up the deficit , this is a home grown scheme.  The whole design even if it is not good good in all ways. Still seems very good in bringing the foreigners to market as well.  I got a news if volume of market keep increasing like this, and market performance kept like this.  Pakistan stock market can be eligible to join EMERGING MARKETS INDEX from current FRONTIER MARKETS.  That will mean P/E of PAKISTAN STOCKS , will at least increase by 50 %.

Coming back to retail investors, some short term adjustments may come but overall good as weak holders are creating to much speculation that regulator and govt wants to check it as they are fearing its level may go up and up if there is no regulation and tax.
Title: Re: CGT -- Capital Gains Tax
Post by: invincible on March 10, 2012, 01:46:32 PM
"As per the proposal, the source of investment may not be asked from investors who would make investment for at least minimum holding period of 120 days".

This is what, they(big Players) were craving for.   :rtfm:
Title: Re: CGT -- Capital Gains Tax
Post by: imran.hafeez on March 10, 2012, 01:48:58 PM
If below is what is going to be passed, then on monday market will inshallah cross 13,500

"As per the proposal, the source of investment may not be asked from investors who would make investment for at least minimum holding period of 120 days".

This is what, they(big Players) were craving for.   :rtfm:
Title: Re: CGT -- Capital Gains Tax
Post by: invincible on March 10, 2012, 01:56:10 PM
If below is what is going to be passed, then on monday market will inshallah cross 13,500

"As per the proposal, the source of investment may not be asked from investors who would make investment for at least minimum holding period of 120 days".

This is what, they(big Players) were craving for.   :rtfm:

Hopefully, rest our respected Mods (Farzooq & MM) can throw light in far a better way on this subject.

Regards,
Title: Re: CGT -- Capital Gains Tax
Post by: msypk on March 10, 2012, 05:39:50 PM
Farzooq bahi express yr views regarding 120 days holding period.how will the market react to it on monday.

 :thanks:
Title: Re: CGT -- Capital Gains Tax
Post by: 007 on March 10, 2012, 05:55:40 PM
good news
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on March 10, 2012, 06:06:17 PM
(http://a4.sphotos.ak.fbcdn.net/hphotos-ak-ash2/64667_10150727748795681_565855680_11773636_379331209_n.jpg)
Title: Re: CGT -- Capital Gains Tax
Post by: Poker Face on March 10, 2012, 06:07:59 PM
(http://a4.sphotos.ak.fbcdn.net/hphotos-ak-ash2/64667_10150727748795681_565855680_11773636_379331209_n.jpg)
it means if you gain in one scrip and lose in 2nd scrip, you cannot go away from paying cgt in that scrip even if your overall portfolio is negative for the period?  :skeptic:
Title: Re: CGT -- Capital Gains Tax
Post by: HAMDANI_Punjtani on March 10, 2012, 06:24:36 PM
guys what about this 120 days holding period. ?? is this the holding period for one single share or something else
Title: Re: CGT -- Capital Gains Tax
Post by: stockz_123 on March 10, 2012, 06:43:07 PM
guys what about this 120 days holding period. ?? is this the holding period for one single share or something else

this issue is extremly negative, volumes turn dry, would plunge the market.
Title: Re: CGT -- Capital Gains Tax
Post by: Irfankhan on March 10, 2012, 07:50:22 PM
guys what about this 120 days holding period. ?? is this the holding period for one single share or something else

this issue is extremly negative, volumes turn dry, would plunge the market.
true, brother i agree the volumne can go dry but that means anyone want to sell and donot want to show where the funds came from then they can sell after 120 days and then buy again on 121st day.
is that correct what i understood? sorry brother i am not very much educated in this
Title: Re: CGT -- Capital Gains Tax
Post by: M&M on March 10, 2012, 09:01:22 PM
something is better than nothing ..
Title: Re: CGT -- Capital Gains Tax
Post by: 007 on March 10, 2012, 11:12:52 PM
requires clarity
Title: Re: CGT -- Capital Gains Tax
Post by: stockz_123 on March 10, 2012, 11:42:46 PM
guys what about this 120 days holding period. ?? is this the holding period for one single share or something else

this issue is extremly negative, volumes turn dry, would plunge the market.
true, brother i agree the volumne can go dry but that means anyone want to sell and donot want to show where the funds came from then they can sell after 120 days and then buy again on 121st day.
is that correct what i understood? sorry brother i am not very much educated in this

yup true 
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on March 11, 2012, 10:38:54 AM

New ord to discourage speculative trading in bourses

 March 11, 2012 | 0
LAHORE - SALMAN ABDUHU - The new ordinance of whitening of stashed money, being implemented from next month, aimed at enhancing liquidity in the capital market by encouraging more foreign investment, besides disheartening speculative trade at the bourses.

Majority of financial market experts and industrialists appreciated the government decision, saying the purpose of the scheme is to attract new investment to the stock market, which has seen activity decline gradually since 2009.

ABM Securities chief executive Asif Beg Mirza said a tax amnesty scheme for stock market will be implemented through presidential order from April 01, and no questions will be asked about the source of investment for the shares held for more than 120 days.

He said that the amnesty had been granted to enhance the investments in the equity markets. Under the new presidential ordinance there will be no inquiry of source if investment is made at KSE for up to 4 months and no tax will be applied on it. The new ordinance will allow investors to inject money without declaring the source of income till June 2014. There will be CVT of 0.01 percent on trading of shares from April 1 also. He said that tax exemption was met with cheers and applause of the stock traders who rushed into equities lifting the volume of trade to a six-year high on Friday—the first working day following the amnesty announcement.

Former chairman of Poultry Association Abdul Basit appreciated the government decision, but pointed out that it should not be misused. He said that amnesty should not be stock investment specific rather the scheme should also promote industrialization in the country. He stated that when stashed money will be invested for industrialization, it will generate employment and enhance liquidity, leading to ultimately the fast economic growth in the country.  He urged the law makers to exempt such profit money from tax, which is reinvested in the industry, as in this way, the industrialization process will get a boost.

He called for restricting commercial as well as investment banks to enhance lending to manufacturing sector at least by 50 per cent instead of loaning other sectors. In this way the manufacturing sector will have more chances to avail loans for setting up industry, he added. He demanded of the government to avoid double taxation in corporate sector to attract foreign investment in the country.

Responding to a question, he said that a simple example is that the market value of entire Karachi Stock Market is around $30 billion which is peanuts. We need the capital to be around $500 billion with the size of the economy and through this ordinance task can be achieved, Basit added.

LSE MD Aftab Ch told TheNation that the TRG discussed the modus operandi for implementing the Capital Gains Tax (CGT) on sale of shares.

In the budget 2010/11 the government imposed 10 per cent capital gains tax on holding of shares below six months and 7.5 per cent for holding less than 12 months. However, exemption is granted on holding shares for more than one year. The tax was not implemented due to objections raised by equity markets saying it would hamper investment in the equity markets. He said that again Securities Exchange Commission of Pakistan (SECP) presented recently a set of proposals to finance ministry regarding CGT, which were accepted.

He observed: “The proposals accepted by the finance minister included: capping the present capital gains tax rate till 2014; tax immunity from declaring source of income till 2014; tax deduction by National Clearing Company of Pakistan (NCCPL); each stock member allowed exposure of Rs 50 million; and abolishing the withholding tax”.

Aftab Ch, when queried said four months would be a minimum holding period and the SECP proposals were crafted to facilitate all concerned. He said that ordinance would help deepen markets and generate volumes, attracting new investment that would help in economic and industrial growth.

He added that while investors would be enriched by bigger capital gains, the government would also be able to collect bumper cash in the form of CGT.

However, Dr Qais Aslam, an economist observed that the ordinance could have positive ramifications but it should not facilitate ‘whitening’ of ‘black money’. Alluding to the fixation of certain holding period, he said that unscrupulous elements should not be provided a conduit for undocumented wealth to be invested in stocks one day and come out clean the next day.

Muhammad Hussain Mehkari, former SVP Allied Bank, observed that stock value is basically speculating on the future value of companies - without underlying growth and given the lack of any business activity this growth will only be speculative with nothing substantial to back this up. Money will flow in - some would make money but lot of others will lose their fortunes

Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on March 11, 2012, 10:57:14 AM

Eighth Schedule of IT Ord on CGT:Draft suggests filing of wealth statement for 2012
 Sunday, 11 March 2012 09:24

RECORDER REPORT

ISLAMABAD: The preliminary draft of the Eighth Schedule of the Income Tax Ordinance 2001 on Capital Gains Tax (CGT) has proposed filing of wealth statement for the Tax Year 2012 by investors of stock exchanges.

Sources told Business Recorder that 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, it has been proposed to file wealth statement by the investors of stock exchanges for Tax Year 2012. 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 under discussion among tax managers, Securities and Exchange Commission of Pakistan and Ministry of Finance, sources said.

The proposed section 2 of the draft Schedule says that where a person has made any investment in the shares of a public company acquired through a registered stock exchange in Pakistan, enquiries as to the nature and source of the amount invested shall not be made for any investment made prior to the introduction of this Schedule provided that: Firstly, a statement of investments is filed with the Commissioner along with the return of income and wealth statement for tax year 2012 in the prescribed manner. Secondly, that the amount remains invested for a period of 120 days in the manner as may be prescribed.

Sources said that the where a person has made any investment in the shares of a public company acquired through a registered stock exchange in Pakistan from April 1, 2012 to June 30, 2014, enquiries as to the nature and sources of amount invested shall not be made provided that: Firstly, the amount remains invested for a period of 120 days in the manner as may be prescribed and secondly, the tax on capital gains, if any, has duly been discharged in the manner laid down in this Schedule, proposed section 2 of the draft Eighth Schedule of the Income Tax Ordinance 2001 added.

The proposed section 6 of the draft Eighth Schedule of the Income Tax Ordinance 2001 covers responsibility and obligation of NCCPL. The capital gains on disposal of listed securities, subject to tax under section 37A, and to which section 100B apply, shall be computed and determined under this Schedule and tax thereon shall be collected and deposited on behalf of taxpayers by NCCPL in the manner prescribed. The Central Depository Company of Pakistan Limited shall furnish information as required by NCCPL for discharging obligations under this Schedule. The NCCPL shall issue an annual certificate to the taxpayer on the prescribed form in respect of capital gains subject to tax under this Schedule for a financial year. Every taxpayer shall file the certificate along with the return of income. Such certificate shall be conclusive evidence in respect of the income under this Schedule. The NCCPL shall furnish to the Board within 30 days of the end of each quarter, a statement of capital gains and tax computed thereon in that quarter in the prescribed manner and format, draft of the Eighth Schedule of the Income Tax Ordinance 2001 said.

Under the draft procedure, Pakistan Revenue Automation Limited (PRAL), a company incorporated under the Companies Ordinance, 1984 or any other company or firm approved by the Board shall conduct regular system and procedural audits of NCCPL on quarterly basis for determining tax on capital gains of the respective person as determined under this Schedule. The NCCPL shall not be liable for any error, omission or mistake that has occurred from application of the system as audited by the respective entity. The NCCPL shall be empowered to refer a particular case for recovery of tax to the Board in case NCCPL is unable to recover the amount of tax.

Following is the preliminary draft of the proposed Eighth Schedule of the Income Tax Ordinance 2001:

100B  Special provision relating to capital gain tax

(1) 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.

(2) Sub–section (1) shall not apply to the following persons or class of persons:

(a) a Mutual fund;

(b) a Banking Company, a non-banking finance company, and an insurance company subject to tax under the Fourth Schedule;

(c) a Modaraba;

(d) a ‘Foreign Institutional Investor’ being a person registered with NCCPL as a foreign institutional investor; and

(e) any person or class of persons as notified by the Board.

(3) This section shall be applicable from April 1, 2012.

EIGHTH SCHEDULE

(Section 100B)

RULES FOR THE COMPUTATION OF CAPITAL GAINS ON LISTED SECURITIES

1. Manner and basis of computation of capital gains and tax thereon

(1) Capital gains on disposal of listed securities, subject to tax under section 37A, and to which section 100B apply, shall be computed and determined under this Schedule and tax thereon shall be collected and deposited on behalf of taxpayers by NCCPL in the manner prescribed.

(2)   Central Depository Company of Pakistan Limited shall furnish information as required by NCCPL for discharging obligations under this Schedule.

(3) NCCPL shall issue an annual certificate to the taxpayer on the prescribed form in respect of capital gains subject to tax under this Schedule for a financial year.

(4) Every taxpayer shall file the certificate referred to in sub-rule (3) along with the return of income. Such certificate shall be conclusive evidence in respect of the income under this Schedule.

(5)   NCCPL shall furnish to the Board within 30 days of the end of each quarter, a statement of capital gains and tax computed thereon in that quarter in the prescribed manner and format.

(6) Capital gains computed under this Schedule shall be chargeable to tax at the rate applicable in Division VII of Part I of the First Schedule.

2. Sources of Investment

(1) Where a person has made any investment in the shares of a public company acquired through a registered stock exchange in Pakistan, enquiries as to the nature and source of the amount invested shall not be made for any investment made prior to the introduction of this Schedule provided that:

(a) a statement of investments is filed with the Commissioner alongwith the return of income and wealth statement for tax year 2012 in the prescribed manner; and

(b) that the amount remains invested for a period of 120 days in the manner as may be prescribed.

(2) Where a person has made any investment in the shares of a public company acquired through a registered stock exchange in Pakistan from April 1, 2012 to June 30, 2014, enquiries as to the nature and sources of amount invested shall not be made provided that:

(a) the amount remains invested for a period of 120 days in the manner as may be prescribed ; and

(b) tax on capital gains, if any, has duly been discharged in the manner laid down in this Schedule.

3. Certain provisions of the Ordinance not to apply

The respective provisions for collection and recovery of tax, advance tax and deduction of tax at source laid down in the Parts IV, V and VI of Chapter X shall not apply on the income from capital gains subject to tax under this Schedule and these provisions shall apply in the manner as laid down in the rules as prescribed by the Board, except where the recovery of tax is referred by NCCPL to the Board in terms of Rule 6(4).

4. Payment of tax collected by NCCPL to the Board

The amount collected by NCCPL, on behalf of the Board as computed in the manner laid down under this Schedule shall be deposited in a separate bank account with National Bank of Pakistan and the said amount shall be paid to the Board along with interest accrued thereon on yearly basis by July 31.

5. Persons to whom this Schedule shall not apply

If a person intends not to opt for determination and payment of tax as laid down in this Schedule, he shall file an irrevocable option to NCCPL after obtaining prior approval of the Commissioner in the manner prescribed. In such case the provisions of Rule 2 shall not apply.

6. Responsibility and obligation of NCCPL

(1) Pakistan Revenue Automation Limited (Pral), a company incorporated under the Companies Ordinance, 1984 or any other company or firm approved by the Board or any authority appointed under section 209 of the Ordinance, not below the level of an Additional Commissioner Inland Revenue, shall conduct regular system and procedural audits of NCCPL on quarterly basis for determining tax on capital gains of the respective person as determined under this Schedule.

(2) NCCPL shall not be liable for any error, omission or mistake that has occurred from application of the system as audited by the respective entity.

(3) NCCPL shall be empowered to refer a particular case for recovery of tax to the Board in case NCCPL is unable to recover the amount of tax.

7. Transitional Provisions

In respect of tax year 2012, for the period April 1 to June 30, 2012, the certificate issued by NCCPL under Rule 1(3) shall be the basis of capital gains and tax thereon for that period, initial draft of the proposed law added.
Title: Re: CGT -- Capital Gains Tax
Post by: msypk on March 11, 2012, 12:10:03 PM
farzooq bahi ,
will it impact the market tomorrow in a good way or a bad way ?
Title: Re: CGT -- Capital Gains Tax
Post by: invincible on March 11, 2012, 12:25:56 PM
farzooq bahi ,
will it impact the market tomorrow in a good way or a bad way ?

Market will remain bullish as far as my opinion is concerned.  :goodc:
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on March 11, 2012, 03:27:56 PM
farzooq bahi ,
will it impact the market tomorrow in a good way or a bad way ?

Todays brecorder news has clearly a lot of confusions which are all good.
market will keep on rising with minor corrections on its way up.
Title: Re: CGT -- Capital Gains Tax
Post by: imran.hafeez on March 11, 2012, 03:32:30 PM
After going through all the newspapers reports on CGT, i have developed following feeling:

If investors sells the share before 120 days, then normal CGT taxation will apply along with 0.01% CVT

But if investor sells the share after 120 days, then increased 0.02% CVT will apply, but investor will not have to pay any CGT on the gains.

Kindly confirm?
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on March 11, 2012, 03:46:09 PM
After going through all the newspapers reports on CGT, i have developed following feeling:

If investors sells the share before 120 days, then normal CGT taxation will apply along with 0.01% CVT

But if investor sells the share after 120 days, then increased 0.02% CVT will apply, but investor will not have to pay any CGT on the gains.

Kindly confirm?


Eighth Schedule of IT Ord on CGT:Draft suggests filing of wealth statement for 2012
 Sunday, 11 March 2012 09:24

RECORDER REPORT


Read the actual draft there is no such thing mentioned. Its all clear that the amount invested has to be for 120 days and the only addition is filling of wealth statement. 
Title: Re: CGT -- Capital Gains Tax
Post by: HAMDANI_Punjtani on March 11, 2012, 09:48:58 PM
After going through all the newspapers reports on CGT, i have developed following feeling:

If investors sells the share before 120 days, then normal CGT taxation will apply along with 0.01% CVT

But if investor sells the share after 120 days, then increased 0.02% CVT will apply, but investor will not have to pay any CGT on the gains.

Kindly confirm?

" Firstly, the amount remains invested for a period of 120 days in the manner as may be prescribed  and secondly, the tax on capital gains, if any, has duly been discharged in the manner laid down in this Schedule, proposed section 2 of the draft Eighth Schedule of the Income Tax Ordinance 2001 added."

sub kuch iss sentence mein chupa hai :biggrin:
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on March 26, 2012, 12:13:40 PM
(http://a6.sphotos.ak.fbcdn.net/hphotos-ak-ash3/s320x320/523418_358351014203332_100000853093022_970250_95609290_n.jpg)
Title: Re: CGT -- Capital Gains Tax
Post by: hirani on March 26, 2012, 10:45:57 PM
As per media president will come by March 31, 2012 from London as on private visit. Let see whether he will get the pen to sign the CGT SRO or not march 31. Otherwise April 01, 2012 will be April fxxl for KSE
Title: Re: CGT -- Capital Gains Tax
Post by: invincible on March 26, 2012, 10:52:03 PM
As per media president will come by March 31, 2012 from London as on private visit. Let see whether he will get the pen to sign the CGT SRO or not march 31. Otherwise April 01, 2012 will be April fxxl for KSE


His personal presence is not obligatory since Chairman Senate can sign on his behalf.  :goodc:
Title: Re: CGT -- Capital Gains Tax
Post by: Muhammad Fahad on March 26, 2012, 11:11:31 PM
As per media president will come by March 31, 2012 from London as on private visit. Let see whether he will get the pen to sign the CGT SRO or not march 31. Otherwise April 01, 2012 will be April fxxl for KSE


His personal presence is not obligatory since Chairman Senate can sign on his behalf.  :goodc:

agar itni leadership hoti tau mulk ka eh haal hota :laugh:
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on March 29, 2012, 09:27:07 AM
Securities and Exchange Commission of Pakistan (SECP) Chairman Muhammad Ali has ruled out implementation of new capital gains tax (CGT) regime in stock market from April 1, 2012 and said that Presidential Ordinance on the changes in CGT regime is under preparation and will take time to be finalised.
Title: Re: CGT -- Capital Gains Tax
Post by: M&M on March 29, 2012, 09:40:25 AM
Securities and Exchange Commission of Pakistan (SECP) Chairman Muhammad Ali has ruled out implementation of new capital gains tax (CGT) regime in stock market from April 1, 2012 and said that Presidential Ordinance on the changes in CGT regime is under preparation and will take time to be finalised.
they played an April Fool gag on us  :mad:
Title: Re: CGT -- Capital Gains Tax
Post by: momo on March 29, 2012, 09:44:54 AM
Securities and Exchange Commission of Pakistan (SECP) Chairman Muhammad Ali has ruled out implementation of new capital gains tax (CGT) regime in stock market from April 1, 2012 and said that Presidential Ordinance on the changes in CGT regime is under preparation and will take time to be finalised.
they played an April Fool gag on us  :mad:

Surprised?
Title: Re: CGT -- Capital Gains Tax
Post by: M&M on March 29, 2012, 09:47:05 AM
Revised CGT regime not applicable from April 1
March 29, 2012
RECORDER REPORT
0 Comments
E-mailPrintPDF

Business Recorder Logo 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 finalisation 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 finalisation 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 finalised among tax managers, Securities and Exchange Commission of Pakistan and Ministry of Finance.

-------------------------
tuesday ki press conference ab report horahi hey .. BS  :brickwall:
Title: Re: CGT -- Capital Gains Tax
Post by: mkj04 on March 29, 2012, 10:40:43 AM
 
 
 
From The News Desk
 
 
 
 
 
Implementation of new CGT regime in stock markets has been delayed
March 29, 2012 10:09
 
Chairman of KSE, Muhammad Ali, said that implementation of new CGT regime in stock markets has been delayed from Apr 1’12 due to legal formalities and presidential ordinance on changes in CGT is under preparation and will take some time to be finalized. He further stated that demutualization of stock exchanges will be completed within 4 months.
---
Title: Re: CGT -- Capital Gains Tax
Post by: mra901 on March 29, 2012, 01:38:45 PM
Any body have a link of His yesterday's press confress

 :thanks:
Title: Re: CGT -- Capital Gains Tax
Post by: dreamer on April 11, 2012, 06:56:28 PM

CGT reforms may be delayed untill budget announcement

http://dawn.com/2012/04/11/stocks-end-lower-rupee-on-rates-flat/
Title: Re: CGT -- Capital Gains Tax
Post by: dreamer on April 24, 2012, 09:09:07 AM
ordinance expected very soon
http://dawn.com/2012/04/24/govt-to-allow-investment-of-black-money-in-stock-market/
Title: Re: CGT -- Capital Gains Tax
Post by: junaidph on April 24, 2012, 09:22:09 AM
ordinance expected very soon
http://dawn.com/2012/04/24/govt-to-allow-investment-of-black-money-in-stock-market/

Look Kamal and Malik for this positive news which i told u guys yesterday, My sources zindabad
Title: Re: CGT -- Capital Gains Tax
Post by: junaidph on April 24, 2012, 09:22:44 AM
Keep it up  :shoaby: :shoaby: :shoaby: :shoaby: :shoaby: :shoaby: :shoaby:
SRO shehzada  :clap1: :clap1: :clap1: :clap1: :clap1: :clap1: :clap1:
Title: Re: CGT -- Capital Gains Tax
Post by: tariqmeh on April 24, 2012, 09:25:54 AM
A well-placed source told Dawn on Monday that the Federal Board of Revenue had vetted the required ordinance from the law ministry to make way for implementing the controversial decision, the first of its kind in the country’s history.

The FBR will send the draft ordinance to the presidency on Tuesday and President Asif Ali Zardari will promulgate it over the next 24 hours, the source said, adding that the urgency was clear from the fact that the president had convened the National Assembly session on April 25
Title: Re: CGT -- Capital Gains Tax
Post by: decentshaw on April 24, 2012, 11:02:04 AM
Expectations with Govt Dont meet most of times..  SRO will not come
Title: Re: CGT -- Capital Gains Tax
Post by: Akif on April 24, 2012, 11:19:58 AM
Expectations with Govt Dont meet most of times..  SRO will not come
FBR to present draft ordinance regarding amended CGT
Tuesday - Apr 24, 2012 | 10:27:31 | 24 of 24
FBR will reportedly present the draft ordinance regarding amended CGT to President today who will sign the presidential order within 24 hours. If presidential order is signed, investors will not be required to disclose source of income of the money invested in stock exchange within 120 business days

AKD
Title: Re: CGT -- Capital Gains Tax
Post by: Hassan_Ali_Khan on April 24, 2012, 11:48:35 PM
Suna hai SRO signed by President .... abi message aya hai .... I dont know its true or not
Title: Re: CGT -- Capital Gains Tax
Post by: Akif on April 24, 2012, 11:50:05 PM
Suna hai SRO signed by President .... abi message aya hai .... I dont know its true or not
kisey nay ghusa nikala hoga , pressure bharta ja raha hay  :tongue:
Allah mubarik karay app key zaban koo.  :thumbsup_anim:
Title: Re: CGT -- Capital Gains Tax
Post by: Hassan_Ali_Khan on April 24, 2012, 11:52:27 PM
boss ab kal he confirm hoga dost ka msg aya hai, he works in a brokage house
Title: Re: CGT -- Capital Gains Tax
Post by: Akif on April 24, 2012, 11:55:44 PM
boss ab kal he confirm hoga dost ka msg aya hai, he works in a brokage house
kal tak neend kisay aney hay abb.  :brickwall:
Title: Re: CGT -- Capital Gains Tax
Post by: Akif on April 24, 2012, 11:57:08 PM
Zardari nay ajj kuch sign kea tho hay, 9 bajay tv pay bata rahay thay lakin pata nahey kia tha. sro nahey tha meray khial mai.  :down:
Title: Re: CGT -- Capital Gains Tax
Post by: stockchild on April 25, 2012, 12:01:39 AM
check aj tv news. Just heard the news that "zardari signed CGT Rules ordinance"
Title: Re: CGT -- Capital Gains Tax
Post by: frazmunaf on April 25, 2012, 12:02:57 AM
signed :shoaby: :laugh: :clap1: :thanks: :banana: :thumbsup_anim: ::) :biggrin: ;) :biggthumpup: :laugh: :goodc: :clap1: :thanks:
Title: Re: CGT -- Capital Gains Tax
Post by: ras.soft on April 25, 2012, 12:12:08 AM
Not watching news.

Is it confirmed SRO signed
Title: Re: CGT -- Capital Gains Tax
Post by: ras.soft on April 25, 2012, 12:27:43 AM
Not watching news.

Is it confirmed SRO signed

OK confirmed. signed :)
Title: Re: CGT -- Capital Gains Tax
Post by: BullsBears on April 25, 2012, 12:29:17 AM
Yes confirmed on aaj news 5 mins ago..
Title: Re: CGT -- Capital Gains Tax
Post by: asim.786 on April 25, 2012, 12:45:10 AM
Fake
sub kamosh hainm yahan thou.  :lazy2:

check chat history for all JS chats, all active JSitem traders (myself as well) are sharing ideas there all day ;)
Zardari signed no any Sro it's aall fake rumur
Title: Re: CGT -- Capital Gains Tax
Post by: ras.soft on April 25, 2012, 12:47:33 AM
Fake
sub kamosh hainm yahan thou.  :lazy2:

check chat history for all JS chats, all active JSitem traders (myself as well) are sharing ideas there all day ;)
Zardari signed no any Sro it's aall fake rumur

Yaar Tv par aa raha par news check karo. Aaj tv dekho
Title: Re: CGT -- Capital Gains Tax
Post by: imran.hafeez on April 25, 2012, 12:48:09 AM
zardari has signed intellectual properties ordinance today as Business Recorder website.

If this ordinance is signed then it is very logical that CGT oridnance should have been signed as well
Title: Re: CGT -- Capital Gains Tax
Post by: ras.soft on April 25, 2012, 12:49:27 AM
Rumor to koi nahin hai. TV par aa rahi hai
Title: Re: CGT -- Capital Gains Tax
Post by: imran.hafeez on April 25, 2012, 12:57:03 AM
Only AAJ TV saying that CGT signed. No other channel claiming it yet
Title: Re: CGT -- Capital Gains Tax
Post by: stockz_123 on April 25, 2012, 12:58:18 AM
Only AAJ TV saying that CGT signed. No other channel claiming it yet


normaly aaj tv pe he ati hen market se related news its been very active in kse news bro.
Title: Re: CGT -- Capital Gains Tax
Post by: ras.soft on April 25, 2012, 01:00:58 AM
Only AAJ TV saying that CGT signed. No other channel claiming it yet


normaly aaj tv pe he ati hen market se related news its been very active in kse news bro.

Aaj and business recorder are same group . You can trust this news
Title: Re: CGT -- Capital Gains Tax
Post by: stockz_123 on April 25, 2012, 01:02:13 AM
Only AAJ TV saying that CGT signed. No other channel claiming it yet


normaly aaj tv pe he ati hen market se related news its been very active in kse news bro.

Aaj and business recorder are same group . You can trust this news

ok ras.soft brother thanks.
Title: Re: CGT -- Capital Gains Tax
Post by: mazeem on April 25, 2012, 01:15:21 AM
yes Aaj tv ki headline news mai aaya hai CGT signed
 :clap1:
Title: Re: CGT -- Capital Gains Tax
Post by: msypk on April 25, 2012, 01:26:12 AM
news again repeated sro has arrived
Title: Re: CGT -- Capital Gains Tax
Post by: Abid_ali on April 25, 2012, 01:38:59 AM
news again repeated sro has arrived
The signing of intellectual ordinance only has been aired by all channals
Title: Re: CGT -- Capital Gains Tax
Post by: mshakilsadiq on April 25, 2012, 02:24:18 AM
Only AAJ TV saying that CGT signed. No other channel claiming it yet


normaly aaj tv pe he ati hen market se related news its been very active in kse news bro.

Aaj news belongs to business recorder.
Title: Re: CGT -- Capital Gains Tax
Post by: Abid_ali on April 25, 2012, 02:34:24 AM
news again repeated sro has arrived
arrived or signed.there is huge difference in arrival and signing.
Title: Re: CGT -- Capital Gains Tax
Post by: Dove on April 25, 2012, 06:49:16 AM
No solid news as yet about signing of CGT ordinance. The big............ has only signed Itellectual Property Rights ordinance. There is no news on the website of Aaj tv or BR. So be cool and decide your moves accordingly.
Title: Re: CGT -- Capital Gains Tax
Post by: Tarzan on April 25, 2012, 07:35:37 AM
It is signed. News in Brecorder confirmed.
Title: Re: CGT -- Capital Gains Tax
Post by: Optimist on April 25, 2012, 07:49:34 AM
It is signed. News in Brecorder confirmed.

just saw on Dawn news channel,, ticker said President hass signed the Capital gain tax and investment in stock exchange ordinanace. :)
Title: Re: CGT -- Capital Gains Tax
Post by: ashar on April 25, 2012, 07:51:15 AM
It is signed. News in Brecorder confirmed.

At persent there is no news of sighning of sro on the website of any newspaper/ tv including business recorder. Yaroo be careful. There is a news on dawn which states that it may likely to sighn. No conformation as yet anywhere
Title: Re: CGT -- Capital Gains Tax
Post by: Optimist on April 25, 2012, 07:56:20 AM
It is signed. News in Brecorder confirmed.

At persent there is no news of sighning of sro on the website of any newspaper/ tv including business recorder. Yaroo be careful. There is a news on dawn which states that it may likely to sighn. No conformation as yet anywhere

though on dawn it was written k kar diye hain ,,, but what I found in tribune is this http://tribune.com.pk/story/369328/president-signs-intellectual-property-rights-ordinance/ ...confusion.. :confused1: :shock:
Title: Re: CGT -- Capital Gains Tax
Post by: talha1976 on April 25, 2012, 08:22:56 AM
This ordinance not belongs to stock market
Title: Re: CGT -- Capital Gains Tax
Post by: decentshaw on April 25, 2012, 08:26:33 AM
Confusion, confusion. Intellectual property bill sign. The both reports on Business recorder and Tribune dont state of any CGT ammendments??

President signs Intellectual Property Rights Ordinance
Tuesday, 24 April 2012 19:50
E-mailPrintPDF

KARACHI: President Asif Ali Zardari Tuesday signed the Intellectual Property Rights (IP) Ordinance 2012 on the advice of Prime Minister Syed Yusuf Raza Gilani.

Spokesperson to the President Senator Farhatullah Babar said that the Ordinance was signed as the Ordinance already in field expired in March and the Intellectual Property Rights Bill is still pending in the Parliament for approval.

He said that April 26 is observed throughout the world as the International IP Day to highlight how the IP system contributes to the flourishing of business and technological innovation.

Intellectual property rights involve rights to protect trademarks, patents, copyrights, industrial designs, plant breeders rights, traditional knowledge and folklore.

Pakistan being the signatory of World Trade Organization and Trade related aspects of Intellectual Property Rights (TRIPS), is under obligation to build a strong IP system in the country by protecting IP rights from infringement and piracy, he said.

Intellectual property rights, promoting creativity and innovation, are recognized throughout the world as the basis of a nation's economy and promoting the culture of research and development.

 
Copyright APP (Associated Press of Pakistan), 2012
Title: Re: CGT -- Capital Gains Tax
Post by: Akif on April 25, 2012, 08:29:04 AM
zardari has signed intellectual properties ordinance today as Business Recorder website.

If this ordinance is signed then it is very logical that CGT oridnance should have been signed as well
I have seen same news on ary and express. farhat ulaah babar statement was also included in it. Zardari spokes person can't gave wrong statement in election year my friends.  :biggthumpup:
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on April 25, 2012, 08:29:36 AM
CGT Ordinance 2012 Promulgated
 April 25, 2012
AHMED MALIK

 President Asif Ali Zardari has promulgated the Capital Gains Tax Ordinance 2012 to give a boost to liquidity on stock market.

The Ordinance will become part of the Finance Bill 2012 to be placed before the National Assembly on May 25th and will only apply to investor portfolio on ready market.


Under the revised CGT regime, 10 percent CGT tax would be collected on the holding of shares for the period of less than six months while on the holding of shares for a period between six to 12 months the CGT rate would be at the rate of 8 percent.

This tax rate would be frozen for the period of two years.

The filing of the tax returns will be compulsory along with wealth tax statements for all investors of stock market.

The Capital Gains Tax collection and deduction would be carried out by National Clearing Company of Pakistan Limited (NCCPL), which has been declared a tax collecting agent under the amended law.

As such, there will be no direct contact between investors and the officials of FBR.

The President has also signed the Stock Exchange (Corporatization, Demutualization and Integration) Bill, 2009.

The joint session of the Parliament had unanimously passed this bill on March 28, 2012.
Title: Re: CGT -- Capital Gains Tax
Post by: decentshaw on April 25, 2012, 08:31:23 AM
By the way i tell you one thing, I saw the AAJ news 1am bulletin in which there was news with this head line:
 Sardar Zardari ne capital gain tax k nayeh masaday pe dastakhat ker diye.
It was perhaps wrong news break by Aaj News . What a crap irresponsible news reporting.
Title: Re: CGT -- Capital Gains Tax
Post by: Akif on April 25, 2012, 08:32:20 AM
By the way i tell you one thing, I saw the AAJ news 1am bulletin in which there was news with this head line:
 Sardar Zardari ne capital gain tax k nayeh masaday pe dastakhat ker diye.
It was perhaps wrong news break by Aaj News . What a crap irresponsible news reporting.

exactlyyyyyyyyyyyyyyyyyyyyyyyyyy.  :crying_anim02:
Title: Re: CGT -- Capital Gains Tax
Post by: decentshaw on April 25, 2012, 08:35:15 AM
CGT Ordinance 2012 Promulgated
 April 25, 2012
AHMED MALIK

 President Asif Ali Zardari has promulgated the Capital Gains Tax Ordinance 2012 to give a boost to liquidity on stock market.

The Ordinance will become part of the Finance Bill 2012 to be placed before the National Assembly on May 25th and will only apply to investor portfolio on ready market.


Under the revised CGT regime, 10 percent CGT tax would be collected on the holding of shares for the period of less than six months while on the holding of shares for a period between six to 12 months the CGT rate would be at the rate of 8 percent.

This tax rate would be frozen for the period of two years.

The filing of the tax returns will be compulsory along with wealth tax statements for all investors of stock market.

The Capital Gains Tax collection and deduction would be carried out by National Clearing Company of Pakistan Limited (NCCPL), which has been declared a tax collecting agent under the amended law.

As such, there will be no direct contact between investors and the officials of FBR.

The President has also signed the Stock Exchange (Corporatization, Demutualization and Integration) Bill, 2009.

The joint session of the Parliament had unanimously passed this bill on March 28, 2012.

Farooq bhai, yeh kiski news hai. Dawn, tribune, brecorder main tou nahi hay
Title: Re: CGT -- Capital Gains Tax
Post by: asim.786 on April 25, 2012, 08:36:44 AM
I told yesterday it's all rumur. Only aaj tv gave news other wise no sign of cgt in any other place
Title: Re: CGT -- Capital Gains Tax
Post by: decentshaw on April 25, 2012, 08:39:31 AM
I told yesterday it's all rumur. Only aaj tv gave news other wise no sign of cgt in any other place
Farooq bhai ki news ki date dekho, 25 April hai. Confusion prevails
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on April 25, 2012, 08:40:32 AM
CGT Ordinance 2012 Promulgated
 April 25, 2012
AHMED MALIK

 President Asif Ali Zardari has promulgated the Capital Gains Tax Ordinance 2012 to give a boost to liquidity on stock market.

The Ordinance will become part of the Finance Bill 2012 to be placed before the National Assembly on May 25th and will only apply to investor portfolio on ready market.


Under the revised CGT regime, 10 percent CGT tax would be collected on the holding of shares for the period of less than six months while on the holding of shares for a period between six to 12 months the CGT rate would be at the rate of 8 percent.

This tax rate would be frozen for the period of two years.

The filing of the tax returns will be compulsory along with wealth tax statements for all investors of stock market.

The Capital Gains Tax collection and deduction would be carried out by National Clearing Company of Pakistan Limited (NCCPL), which has been declared a tax collecting agent under the amended law.

As such, there will be no direct contact between investors and the officials of FBR.

The President has also signed the Stock Exchange (Corporatization, Demutualization and Integration) Bill, 2009.

The joint session of the Parliament had unanimously passed this bill on March 28, 2012.

Farooq bhai, yeh kiski news hai. Dawn, tribune, brecorder main tou nahi hay

Brecorder
Title: Re: CGT -- Capital Gains Tax
Post by: decentshaw on April 25, 2012, 08:41:30 AM
Find out the link
http://www.brecorder.com/top-stories/0/1182017/
Title: Re: CGT -- Capital Gains Tax
Post by: junaidph on April 25, 2012, 08:49:18 AM
I revealed this news on Monday Morning that Tuesday night this would be signed, I dont no y people r making others confused , CGT ordinance is signed by Zardar , thats it , now chill and plan what ur portfolio accordingly   :banana: :banana: :banana: :banana: :banana: :banana: :clap1: :clap1: :clap1: :shoaby: :shoaby: :shoaby:
Title: Re: CGT -- Capital Gains Tax
Post by: blue bird on April 25, 2012, 09:02:29 AM
President Asif Ali Zardari has promulgated the Capital Gains Tax Ordinance 2012 to give a boost to liquidity on stock market. AKD
Title: Re: CGT -- Capital Gains Tax
Post by: decentshaw on April 25, 2012, 09:14:41 AM
A gaya CGT jiska tha intezar- Mubarak Ho  :biggrin: :biggrin:
Title: Re: CGT -- Capital Gains Tax
Post by: soulpower on April 25, 2012, 09:18:42 AM
I recieved a similar sms from kasb.
Title: Re: CGT -- Capital Gains Tax
Post by: malikk on April 25, 2012, 09:20:53 AM
I revealed this news on Monday Morning that Tuesday night this would be signed, I dont no y people r making others confused , CGT ordinance is signed by Zardar , thats it , now chill and plan what ur portfolio accordingly   :banana: :banana: :banana: :banana: :banana: :banana: :clap1: :clap1: :clap1: :shoaby: :shoaby: :shoaby:
eId mubarik junaid  :banana: :banana: :banana:
Title: Re: CGT -- Capital Gains Tax
Post by: Abid_ali on April 25, 2012, 09:28:07 AM
I revealed this news on Monday Morning that Tuesday night this would be signed, I dont no y people r making others confused , CGT ordinance is signed by Zardar , thats it , now chill and plan what ur portfolio accordingly   :banana: :banana: :banana: :banana: :banana: :banana: :clap1: :clap1: :clap1: :shoaby: :shoaby: :shoaby:
eId mubarik junaid  :banana: :banana: :banana:
eid qurban mubarik
Title: Re: CGT -- Capital Gains Tax
Post by: kamilshah on April 25, 2012, 09:35:40 AM
kia CGT Future market main apply nahe ho ga? Does anyone know??
Title: Re: CGT -- Capital Gains Tax
Post by: Abid_ali on April 25, 2012, 09:43:26 AM
kia CGT Future market main apply nahe ho ga? Does anyone know??
it is for ready market for availing amnesty
Title: Re: CGT -- Capital Gains Tax
Post by: kamilshah on April 25, 2012, 10:05:52 AM
kia CGT Future market main apply nahe ho ga? Does anyone know??
it is for ready market for availing amnesty

ok Thanks bro.
Title: Re: CGT -- Capital Gains Tax
Post by: stockz_123 on April 25, 2012, 10:20:20 AM
President Zardari has reportedly signed much awaited presidential order for revised CGT regime. This will become part of finance bill and will be placed before the NA on May’25. The provisions of this ordinance will only apply to the ready market.
Title: Re: CGT -- Capital Gains Tax
Post by: Abid_ali on April 25, 2012, 03:37:38 PM
I revealed this news on Monday Morning that Tuesday night this would be signed, I dont no y people r making others confused , CGT ordinance is signed by Zardar , thats it , now chill and plan what ur portfolio accordingly   :banana: :banana: :banana: :banana: :banana: :banana: :clap1: :clap1: :clap1: :shoaby: :shoaby: :shoaby:
eId mubarik junaid  :banana: :banana: :banana:
eid qurban mubarik
ab yah kon si eid hay, sweet or namkin
Title: Re: CGT -- Capital Gains Tax
Post by: stockz_123 on April 25, 2012, 03:47:56 PM
sell @ news..
Title: Re: CGT -- Capital Gains Tax
Post by: Daftari on April 25, 2012, 03:57:45 PM
sell @ news..
at good news too?  :dunno:
Title: Re: CGT -- Capital Gains Tax
Post by: 007 on April 25, 2012, 05:26:44 PM
that seems the logic i think
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on April 25, 2012, 10:07:32 PM
http://stockmarketresearchreports.com//2012/April/25_04_12/AHCM/Capital%20Gains%20Tax-April%2025,%202012.pdf
Title: Re: CGT -- Capital Gains Tax
Post by: imran.hafeez on April 25, 2012, 10:49:58 PM
Signed SRO has been received to NCCPL. ARY News
Title: Re: CGT -- Capital Gains Tax
Post by: naveed on April 25, 2012, 10:57:59 PM
which stocks to choose from now.  After this sro
Title: Re: CGT -- Capital Gains Tax
Post by: SBM on April 26, 2012, 04:38:44 AM
How many of you have actually paid any CGT ? And those who haven't, has your local fbr officer paid you any visit for a cup of chai ?
Title: Re: CGT -- Capital Gains Tax
Post by: SBM on April 26, 2012, 04:40:13 AM
farzooq bhai is it possible to start some sort of polling system on this forum ? It would be good for everyone they can see the opinion of the members on every topic with just a glance.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on April 26, 2012, 04:43:57 AM
http://www.dailytimes.com.pk/default.asp?page=2012\04\26\story_26-4-2012_pg5_11
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on April 26, 2012, 04:47:15 AM
http://www.brecorder.com/top-stories/0:/1182378:public-companies-001-percent-cvt-imposed-on-purchase-of-shares/?date=2012-04-26
Title: Re: CGT -- Capital Gains Tax
Post by: TeleData on April 26, 2012, 11:11:54 AM
@Farzooq,

Kiya jo choatay investors jo return file nai kartay woh bhi ab Return file karay ga !
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on April 26, 2012, 11:20:04 AM
@Farzooq,

Kiya jo choatay investors jo return file nai kartay woh bhi ab Return file karay ga !

yes they will have to file returns
Title: Re: CGT -- Capital Gains Tax
Post by: Optimist on April 26, 2012, 11:27:30 AM
@Farzooq,

Kiya jo choatay investors jo return file nai kartay woh bhi ab Return file karay ga !

yes they will have to file returns

As per Finance (Amendment) Ordinance, 2012, where a person has made any investment in the shares of a public company traded on a registered stock exchange in Pakistan from the date of coming into force of this Schedule till June 30, 2014, enquiries as to the nature and sources of amount invested shall not be made provided that the amount remains invested for a period of 120 days in the manner as may be prescribed

@Farzooq Bhai: does it mean that we have to invest for at least 129 days in the same stock or it means one should invest for 120 days at least in stock exchange and then he can take out his money??? and will there be a form for tax returnn which will be submitted to authorities.???  :confused1:
Title: Re: CGT -- Capital Gains Tax
Post by: ZeeshanPervaiz on April 26, 2012, 11:51:54 AM
Issa koi asan ilfaz ma bayan kar sakta ha ka kya scene ha yeah .. is ka impact kasa ho ga or kis par ho ga ... as i am investing through IGI and all taxes are deducted at there end as they are the broker tu why should i file and return again as far as i knw k direct tax jab tak pay ho raha ha tu return file karna ki zarorat nhi hoti ..... koi isa explain kara ga ??
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on April 26, 2012, 11:59:31 AM
President promulgates CGT Ordinance 2012
In what could arguably be termed as the most awaited development of the year, the President
has promulgated the Capital Gain Tax Ordinance 2012 which aims at reviving confidence at the
KSE after CGT related jitters (cumbersome paperwork and fear of being hassled by tax
authorities over source of income) had sidelined retail investors, since its imposition in 2010.
The Ordinance is primarily aimed at retail investors and is not applicable to mutual funds, banks,
NBFCs, insurance companies, modarabas, and foreign institutional investors. The Ordinance is
valid for 120 days and will be presented in the budget for parliament approval in end May. The
salient features of the ordinance are:
CGT rates frozen for next two years; NCCPL to be computation and collection agent
The rate of CGT has been frozen at 10% (for less than 6 months holding and 8% for holding
between 6 and 12 months) up to 2014 (refer table alongside). In addition, National Clearing
Company of Pakistan (NCCPL) has been designated as computation and collection agent. NCCPL
certificate and return of income will be treated as conclusive evidence in respect of this income.

Exemption from questions on source of income
1. For investors who have invested prior to the introduction of this Ordinance no questions
will be asked regarding source of investment provided (a) statement of investments is filed
along with return of income and wealth statement for 2012 and (b) the amount remains
invested for a 45 days up to 30th June 2012.
2. For investors who have invested between introduction of this new Ordinance and June 30th
2014, no questions will be asked regarding source of investment provided (a) statement of
investments is filed along with return of income and wealth statement for relevant tax year,
(b) capital gains tax has been discharged & (c) the amount remains invested for 120 days.

Potential market reaction
Signing of the Ordinance was reported in newspapers yesterday but details remained scant.
With details now coming through, KSE is likely to elicit an initial positive reaction but
requirements of income returns and wealth statements along with questions over practical
implementation could cap the excitement. Meanwhile levy of 0.01% CVT on purchase of
securities could also act as minor irritant. In addition, relief on income source could invite undue
attention from other stake holders, given quasi?amnesty nature of the scheme.
It is pertinent to note that KSE?100 has already priced in part of the excitement and is up ~30%
since mid?January. However the downside should also remain somewhat protected as the rally
has been lopsided to date and underperformers could emerge as value plays in case the market
takes a breather as heavily anticipated news is in the bag.

kasb
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on April 26, 2012, 12:01:35 PM
The much awaited ordinance for the changes in the
Capital Gain Tax (CGT) was released yesterday and
the details were largely inline with the earlier
proposed changes. The salient features of the
ordinance are as follows:
???? The ordinance comes into effect immediately.
???? NCCPL shall act as a withholding agent, for which it shall
develop an automated system and issue annual
certificates to the taxpayers.
???? The nature and source of investment prior to the
introduction of the ordinance shall not be questioned
provided the amount remains invested for a period of 45
days till June 30, 2012. From the coming into force of the
ordinance till June 30, 2014 the source of income shall
not be asked provided that amount remains invested for a
period of 120 days. The filing of return on income and
wealth within their respective due dates are mandatory.
???? Freeze on current CGT rate i.e. 10% on holdings less
than six months and 8% on holdings between six to
twelve months, for a period of two years
???? Capital Value tax of 0.01% on purchase value has been
imposed, however Withholding Tax on trading of shares
at 0.01% of traded value has been removed
We understand that the ordinance needs to be passed by the
National Assembly (NA) within 120 days to be termed as a
law. If for any reason it is not passed by the NA, the
ordinance will remain valid till August 24, 2012.

Since most of these measures are applicable to individuals,
(who historically have contributed a major chunk of the traded
value), we foresee renewed retail investor interest which is
likely to provide a significant boost to liquidity at the local
bourse. Fundamentally, we maintain our positive outlook on
KSE on the back of impressive earnings growth. Moreover,
the local bourse still trades at a discount of 44% on PE
multiple to its regional peers vs. its historical discount of 34%.
We prefer oil stocks namely POL, PPL, PSO and ATRL,
which mostly have been laggards in the recent bull run.

jsgcl
Title: Re: CGT -- Capital Gains Tax
Post by: jays on April 26, 2012, 05:12:05 PM
that the amount remains invested for a period of forty-five days upto 30 June, 2012, in the manner as may be prescribed
What does as my be prescribed mean here?
Title: Re: CGT -- Capital Gains Tax
Post by: Tezihunt on April 26, 2012, 06:44:20 PM
Full text of CGT ordinance
http://nccpl.com.pk/downloads/7192_CGT-Ordinance-1.pdf (http://nccpl.com.pk/downloads/7192_CGT-Ordinance-1.pdf)
Title: Re: CGT -- Capital Gains Tax
Post by: mra901 on April 26, 2012, 06:46:57 PM
Full text of CGT ordinance
http://nccpl.com.pk/downloads/7192_CGT-Ordinance-1.pdf (http://nccpl.com.pk/downloads/7192_CGT-Ordinance-1.pdf)

 :thanks:alot
Title: Re: CGT -- Capital Gains Tax
Post by: TeleData on April 30, 2012, 12:51:00 PM
Assalam-o-Alaikum

kiya CGT ka issue solved ha !

Kiya Return file karna say Small investor wapais ay jay ga tu is ka jawab ha naheen aap baray bhaiyo ka kiya kheal ha ?
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on May 02, 2012, 10:18:55 AM
CGT ordinance not an amnesty scheme,’ say tax experts
By Kazim Alam

Published: May 2, 2012
 The Pakistan Business Council says stock market could potentially become a major route for laundering of black money.

ISLAMABAD: Market analysts and taxation experts said on Monday that the presidential ordinance which came into effect on April 24 – which allows stock market investors to conceal the sources of their investment for the next two years – could not be termed an ‘amnesty scheme’ for money launderers who wish to whiten their ill-gotten money.
 
According to the ordinance, investors who hold shares for at least 120 days will not be required to reveal their source of investment.
 
Talking to The Express Tribune, AF Ferguson and Company Senior Tax Partner SM Shabbar Zaidi said it is unfair to call the ordinance an amnesty scheme, as investors would still be required to submit wealth statements under the new regulations.
 
“The new system has three added benefits: one, it outsources tax collection to the National Clearing Company of Pakistan (NCCPL), which is conceptually a good idea; two, it’ll result in taxation on net income, as opposed to presumptive taxation, which is a regressive regime; and three, it requires investors to submit wealth statements, which makes it anything but a scheme to launder black money,” Zaidi said.
 
“If it doesn’t work out the way the government expects, it can always withdraw these provisions.”
 
In contrast, the system that was in place prior to the promulgation of this ordinance was “totally ineffective,” he said.
 
Earlier, the Pakistan Business Council (PBC) – an advocacy platform for some of the largest private-sector businesses operating in Pakistan – issued a strong statement against some provisions that are part of the ordinance.
 
It stated that granting amnesty with regard to the source of all funds invested from April 1, 2012, to June 30, 2014 in the stock market was objectionable. “This could potentially become a major route for laundering of funds generated from illegal sources,” it added.
 
In an email to The Express Tribune received on Monday, the official spokesperson of the Securities and Exchange Commission of Pakistan (SECP) – which is the regulator of Pakistan’s stock markets – said stringent know-your-customer and customer-due-diligence policies were being implemented at the broker level; requiring a detailed disclosure of sources of funds at the time of opening of an account with a brokerage firm.
 
He added that the NCCPL will provide investor-wise information and data to the Federal Board of Revenue on a monthly basis. “Therefore, assuming that the SECP proposal (in favour of the provisions) does not take into account concerns vis-à-vis the existing anti-money laundering regime is totally baseless.”
 
However, the PBC supported the provision in the ordinance that makes computation of capital gains tax (CGT) transparent by the NCCPL, as well as freezing present rates of CGT until 2014.
 
Speaking to The Express Tribune, Khurram Schehzad, head of research at Invest Capital Investment Bank, noted the assumption that the stock market was the only – or the easiest – way to whiten black money was wrong.
 
He opined that foreign portfolio investment was likely to increase after promulgation of the ordinance. “The long-term situation, however, will depend a lot on the upcoming budget and the kind of incentives it offers to potential investors,” he noted.
Title: Re: CGT -- Capital Gains Tax
Post by: Tezihunt on May 12, 2012, 09:33:54 AM
SECP notice renders presidential ordinance implementation questionable
      
Salman Siddiqui

KARACHI: The latest notification issued by the Securities and Exchange Commission of Pakistan (SECP) has rendered the implementation of presidential ordinance on revised capital gains tax (CGT) as questionable, as according to the notice, investigative authorities have all the rights to question the “source of investment” even made at the stock exchanges.
The provision of allowing investors to keep their source of investment undisclosed till 2014 shall only be applicable under the Income Tax Ordinance, 2001 (ITO 2001). The provision, however, did not prevent asking source of income under any other law including Anti Money Laundering Act, 2010 (AMLA), the notice said.
“The requirements of AMLA and the rules and regulations made thereunder are not affected by the provision of ITO and no exemption, in whole or in part, is available for any Anti Money Laundering and Combating Financing of Terrorism preventative measures under the AMLA,” the notice said.
The exemption under the provision was not available for the income derived from a “criminal” activity under any other law, it said.
A concerned official at SECP elaborated that the Anti Money Laundering law was above all the laws in concern. “No other law can overrule the Anti Money Laundering law even ITO.”
The official, however, defended the provision on “source of income” under the revised CGT, saying that it has nothing to do with Anti Money Laundering law.
The notice asked stocks market brokers to maintain minimum data about source of investment of high risk customers. The data of such customers would be maintained by brokers under the guidelines provided under Know Your Customers, Customer Due Diligence and Suspicious Transaction Report (STR) reporting required.
The official elaborated that high risk customers were included non-governmental organization, some politicians, and those customers who were not directly involved in their traded at exchanges.
While Suspicious Transaction Report (STR) was meant that if a person or organization, which would make investment over and above its financial capacity, should be reported to Financial Monitoring United existed under the AMLA, the official added.
The notice said, “Brokers shall take reasonable measures for establishing the source of wealth and source of funds for high risk customers and also to obtain sufficient information to determine the expected source of funding for account.”
In case, brokers fail to report the suspicious transaction, if any, brokers would also be treaded as criminals.
“…Section 33 of the AML Act 2010, inter alia specifically provides for criminal sanction on failure to file STRs and for providing false information. Furthermore, in case any member/broker is found to be in violation of above legal requirements, a simultaneous regulatory action shall be initiated,” notice said.
A market analyst, who requested anonymity, questioned the intentions of authorities of the Karachi Stock Exchange, saying that the SECP had issued the notice under discussion on May 08 then why did KSE place the notice on its web site with a delay of three-four days on Friday? He also observed that the notice was placed on the website about a couple of hours before the market was closes on its pre-defined time of 4:30pm on Friday.
He believed that the SECP issued such notice under the pressure of international securities agencies, who wanted a complete control over the movement of illegal money through any channels to avoid financing to terrorist organizations such as al-Qaeda.
Zafar Moti, a broker at the KSE, did not find a contradiction between the provision of relaxation to investors on source of investment with the notice mentioned above.
He said that no one can investment money drove from criminal activities.
“We main all the records of trade transaction whether it was a small transaction of 500 shares or 500 million shares,” he said, “all the transaction of funds in stocks exchange are made through checks. Its mean the transactions are recorded properly.”
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on May 12, 2012, 09:48:50 AM

No exemption available for income derived from criminal activity: SECP

 May 12, 2012
RECORDER REPORT
0 Comments
 The Securities and Exchange Commission of Pakistan (SECP) has announced that the exemption under provisions related to Capital Gain Tax (CGT) for the stock market investment is not available for income derived from a criminal activity under any other law for the time being in force.


"The said provisions shall only be applicable under the Income Tax Ordinance, 2001 (ITO) and does not bar asking source of income under any other law including Anti Money Laundering Act, 2010 (AMLA), the SECP said in a letter sent to all three stock exchanges.

"Pursuant to amendments in the Income Ordinance, 2001 notified through the Finance (Amendment) Ordinance 2012 dated April 24, 2012 whereby provisions related to Capital Gains Tax for the stock market investment have been implemented," the letter said, the stock exchanges are advised to immediately circulate the following for compliance of the members/brokers:-

a.

The said provisions shall only be applicable under the Income Tax Ordinance, 2001 (ITO) and does not bar asking source of income under any other law including Anti Money Laundering Act, 2010 (AMLA).

Therefore, the exemption under these provisions is not available for income derived from a criminal activity under any other law for the time being in force.

b.

The requirements of AMLA and the rules and regulations made thereunder are not affected by these provisions of the ITO and no exemption, in whole or in part, is available for any AML/CFT preventative measures under the AMLA.

The KYC/CDD and Suspicious Transaction Report (STR) reporting required vide stock exchange regulations and guidelines dated February 01, 2012 shall continue regardless of the above amendments.

Therefore, brokers shall take reasonable measures for establishing the source of wealth and source of funds for high risk customers and also to obtain sufficient information to determine the expected source of funding for the account.

c.

The Financial Monitoring Unit may refer any STR to tax authorities notwithstanding the provisions of ITO and tax authorities will continue to cooperate with law enforcement agencies on AML matters.

The SECP said that the Section 33 of the AML Act 2010, inter alia specifically provides for criminal sanctions on failure to file STRs and for providing false information.

Furthermore, in case any member/broker is found to be in violation of above legal requirements, a simultaneous regulatory action shall be initiated
Title: Re: CGT -- Capital Gains Tax
Post by: Dehan on May 12, 2012, 11:26:07 AM

No exemption available for income derived from criminal activity: SECP

 May 12, 2012
RECORDER REPORT
0 Comments
 The Securities and Exchange Commission of Pakistan (SECP) has announced that the exemption under provisions related to Capital Gain Tax (CGT) for the stock market investment is not available for income derived from a criminal activity under any other law for the time being in force.


"The said provisions shall only be applicable under the Income Tax Ordinance, 2001 (ITO) and does not bar asking source of income under any other law including Anti Money Laundering Act, 2010 (AMLA), the SECP said in a letter sent to all three stock exchanges.

"Pursuant to amendments in the Income Ordinance, 2001 notified through the Finance (Amendment) Ordinance 2012 dated April 24, 2012 whereby provisions related to Capital Gains Tax for the stock market investment have been implemented," the letter said, the stock exchanges are advised to immediately circulate the following for compliance of the members/brokers:-

a.

The said provisions shall only be applicable under the Income Tax Ordinance, 2001 (ITO) and does not bar asking source of income under any other law including Anti Money Laundering Act, 2010 (AMLA).

Therefore, the exemption under these provisions is not available for income derived from a criminal activity under any other law for the time being in force.

b.

The requirements of AMLA and the rules and regulations made thereunder are not affected by these provisions of the ITO and no exemption, in whole or in part, is available for any AML/CFT preventative measures under the AMLA.

The KYC/CDD and Suspicious Transaction Report (STR) reporting required vide stock exchange regulations and guidelines dated February 01, 2012 shall continue regardless of the above amendments.

Therefore, brokers shall take reasonable measures for establishing the source of wealth and source of funds for high risk customers and also to obtain sufficient information to determine the expected source of funding for the account.

c.

The Financial Monitoring Unit may refer any STR to tax authorities notwithstanding the provisions of ITO and tax authorities will continue to cooperate with law enforcement agencies on AML matters.

The SECP said that the Section 33 of the AML Act 2010, inter alia specifically provides for criminal sanctions on failure to file STRs and for providing false information.

Furthermore, in case any member/broker is found to be in violation of above legal requirements, a simultaneous regulatory action shall be initiated

What shall be the impact of this cricular on the mkt. All the birds will fly again or sustain.
Title: Re: CGT -- Capital Gains Tax
Post by: invincible on May 12, 2012, 01:06:04 PM
I think it would hit no significant impact. 

SECP cant bluntly say that we will allow black money.  :goodc:

Farzooq bro's  input is awaited.
Title: Re: CGT -- Capital Gains Tax
Post by: malikk on May 12, 2012, 03:55:33 PM
No exemption available for income derived from criminal activity: SECP
 May 12, 2012
RECORDER REPORT
0 Comments
 The Securities and Exchange Commission of Pakistan (SECP) has announced that the exemption under provisions related to Capital Gain Tax (CGT) for the stock market investment is not available for income derived from a criminal activity under any other law for the time being in force.

"The said provisions shall only be applicable under the Income Tax Ordinance, 2001 (ITO) and does not bar asking source of income under any other law including Anti Money Laundering Act, 2010 (AMLA), the SECP said in a letter sent to all three stock exchanges.

"Pursuant to amendments in the Income Ordinance, 2001 notified through the Finance (Amendment) Ordinance 2012 dated April 24, 2012 whereby provisions related to Capital Gains Tax for the stock market investment have been implemented," the letter said, the stock exchanges are advised to immediately circulate the following for compliance of the members/brokers:-

a.The said provisions shall only be applicable under the Income Tax Ordinance, 2001 (ITO) and does not bar asking source of income under any other law including Anti Money Laundering Act, 2010 (AMLA).

Therefore, the exemption under these provisions is not available for income derived from a criminal activity under any other law for the time being in force.

b.The requirements of AMLA and the rules and regulations made thereunder are not affected by these provisions of the ITO and no exemption, in whole or in part, is available for any AML/CFT preventative measures under the AMLA.

The KYC/CDD and Suspicious Transaction Report (STR) reporting required vide stock exchange regulations and guidelines dated February 01, 2012 shall continue regardless of the above amendments.

Therefore, brokers shall take reasonable measures for establishing the source of wealth and source of funds for high risk customers and also to obtain sufficient information to determine the expected source of funding for the account.

c.The Financial Monitoring Unit may refer any STR to tax authorities notwithstanding the provisions of ITO and tax authorities will continue to cooperate with law enforcement agencies on AML matters.

The SECP said that the Section 33 of the AML Act 2010, inter alia specifically provides for criminal sanctions on failure to file STRs and for providing false information.

Furthermore, in case any member/broker is found to be in violation of above legal requirements, a simultaneous regulatory action shall be initiated
jitna kaala dhan andar daalo gay utney he secp clauses may addition bhi keray gi .. simple rule .....awaam ko dikhaao daaen ki , karo baaen ki  :biggthumpup: :thumbsup_anim:
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on May 13, 2012, 01:32:47 PM
CGT rules not to facilitate money laundering
 
From the Newspaper | Dilawar Hussain | 12 hours ago

KARACHI, May 12: A letter written by the Securities and Exchange Commission of Pakistan (SECP) and forwarded to the three stock exchanges has raised a storm in the tea cup.
 
The apex regulator in its dispatch to the bourses stated that the Finance (Amendment) Ordinance, 2012 under which the tax department would not ask questions on the source of funds invested in stocks up to June 30, 2014, is not all inclusive.
 
The money suspected to be channeled into the stocks in contravention of Anti-Money Laundering Act, 2010 would remain open to questions. The letter in essence, therefore, sifts the money invested in stock market, between legal and criminal, more than between black and white or documented and undocumented.
 
The notice sent to the stock exchanges by the apex regulator, dated May 8 reads: “Pursuant to amendments in the Income Tax Ordinance, 2001 notified through the Finance (Amendment) Ordinance 2012 dated April 24, 2012 whereby provisions related
 to Capital Gain Tax (CGT) for the stock market investment have been implemented, the stock exchanges are advised to
 immediately circulate the following for compliance of the members/brokers:
 
The said provisions shall only be applicable under the Income Tax Ordinance, 2001 (ITO) and does not bar asking source of
 income under any other law including Anti-Money Laundering Act, 2010 (AMLA). Therefore, the exemption under these provisions is not available for income derived from a criminal activity under any other law for the time being in force.
 
Second, the requirements of AMLA and the rules and regulations made there under are not affected by these provisions of the ITO and no exemption, in whole or in part, is available for any AML/CFT preventive measures under the AMLA. The KYC/CDD and Suspicious Transaction Report (STR) reporting requirement vide stock exchange regulations and guidelines dated Feb 1, 1012 shall continue regardless of the above amendments. Therefore, brokers shall take reasonable measures for establishing the source of wealth and source of funds for high risk customers and also to obtain sufficient information to determine the expected source of funding for the account.
 
Third, the Financial Monitoring Unit may refer any STR to tax authorities notwithstanding the provisions of ITO and tax authorities will continue to cooperate with law enforcement agencies on AML matters.”
 
The SECP letter also alerted stock brokers regarding Section 33 of the AML Act 2010, which inter aila specifically provide for criminal sanctions on failure to file STRs and for providing false information.
 
“Furthermore, in case any member/broker is found to be in violation of above legal requirements, a simultaneous regulatory action shall be initiated,” the SECP warned.
 
While most brokers during the weekend were taking the Regulator’s note in stride and some even feigned ignorance about the red flag— understandably to soothe investors’ nerves and dispel any panic in the market when it opens on Monday, one senior
 broker asserted that there was nothing new in the SECP note.
 
”Brokers are already required to file an undertaking every 15 days, certifying that there was no violation of Anti-Money
 Laundering Act, 2010 in the ranks of their clients and that the brokerage was following the ‘know your clients’ criteria,” he
 noted.
 
Mr.Nadeem Naqvi, Managing Director of the Karachi Stock Exchange stressed that the SECP letter was being taken ‘out of
 context’ in interpretation. He said that it was a mere ‘clarification’ and did not cause change in the already declared provisions
 of CGT.
 
He said that two months ago, the bourse had further tightened the tap for scrutiny of funds entering the stock market by
 issuance of guidelines for brokers to conform to the AML.
 
“If sufficient suspicion exists that any money flowing in was in contravention of AML or Anti-terror laws, a scrutiny could always be made by the Anti-terrorism or AML task force,” he said. He stressed that unfolding the letter on May 11, sent by the SECP on May 8, was of little consequence for the information was not ‘price sensitive’. The plunge of 383 points in the KSE-100 index in the last two days of the previous trading week, he said, was not the cause of leakage of information to some selected investors, but the result of a flare up in US-Pak relationship and secondly the payment of dues to Independent Power Producers (IPPs) through the OGDC–the highest weighted scrip on the KSE-100 index, which many thought would impact the valuation of
 the big stock.
 
But for all that, it is difficult to shake off the fear that has come to haunt investors’ in stocks. It would be churlish to think that
 the major provision in CGT reformed rules of “no questions to be asked on funds invested in stocks till June 2014” may have ever meant that it supercedes the United Nations Convention Transnational Organised Crime, of which the Article 7 covers
 money laundering. Yet the sudden realisation that funds flowing into the market would, after all, be under the glare of the
 authorities, is likely to deal a blow that the market would take right under the chin, when it opens up for trading on Monday
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 07, 2012, 12:31:51 PM
GoP would not question about the source against investments made in stocks from Jul’12 to Jun’15
June 7, 2012 09:37
As per the FBR Chairman, Mr. Syed Mumtaz Hayder Rizvi, the government would not ask questions about the source against investments made in industry from Jul’12 to Jun’15 provided the investor pays 2% tax against funds declared before close of the current fiscal year.
(AKD)
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on July 12, 2012, 12:53:04 PM
CGT rules: FBR explains holding period
According to the draft statutory regulatory order (SRO), the
securities held on April 23, 2011 shall be deemed as having
holding period of more than one-year for computation of
capital gains tax. Moreover, the cost of such securities shall
be deemed to be the market price (day-end price) of the
securities, as on April 23, 2011.
Title: Re: CGT -- Capital Gains Tax
Post by: Tezihunt on July 27, 2012, 08:49:37 AM
FBR issues draft rules to determine capital gains tax

http://images.thenews.com.pk/27-07-2012/ethenews/e-122917.htm (http://images.thenews.com.pk/27-07-2012/ethenews/e-122917.htm)

Link for SRO

http://www.fbr.gov.pk/SROs/20127261172536325SRO902(I)2012.pdf (http://www.fbr.gov.pk/SROs/20127261172536325SRO902(I)2012.pdf)
Title: Re: CGT -- Capital Gains Tax
Post by: Tezihunt on July 27, 2012, 09:06:13 AM
B.Recorder comments on CGT

http://www.brecorder.com/taxation/181/1221098/ (http://www.brecorder.com/taxation/181/1221098/)
Title: Re: CGT -- Capital Gains Tax
Post by: TeleData on July 30, 2012, 01:34:01 PM
Assalam-o-Alaikum,

Kiya CGT NCCPL Deduct kar rahie hay ya naheen agar naheen tu kub say karay gi ?

Thanks
Title: Re: CGT -- Capital Gains Tax
Post by: TeleData on July 31, 2012, 01:13:05 PM
FARzooq Bhai Attention Please

Assalam-o-Alaikum,

Kiya CGT NCCPL Deduct kar rahie hay ya naheen agar naheen tu kub say karay gi ?

Thanks
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on July 31, 2012, 01:44:57 PM
FARzooq Bhai Attention Please

Assalam-o-Alaikum,

Kiya CGT NCCPL Deduct kar rahie hay ya naheen agar naheen tu kub say karay gi ?

Thanks

not yet
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on September 02, 2012, 11:57:52 AM

Trading of shares: CGT collection likely to start by mid-September
 August 31, 2012
AHMED MALIK

 After the passage of almost three months, the collection of Capital Gains Tax (CGT) on share trading is expected to start by the mid of September 2012. It is learnt that the Ministry of Law has drafted the rules with some changes after receiving public comments.
 
The law ministry would send the finalised and approved rules to the Federal Board of Revenue (FBR) in next couple of days. And the FBR is expected to issue SRO any time during next week, sources said. The CGT was imposed on share trading at the rate of 10 percent if the holding period is less than six months and eight percent if the holding period is between six to 12 months.
 
The President of Pakistan promulgated Finance (Amendment) Ordinance, 2012 in April this year stated that the investors will not be asked about the source of income of the amount invested in companies listed at local bourses till June 30, 2014. Later, the said Ordinance was made part of Finance Bill 2012. The revised capital gains tax regime was to be implemented with effect from July 1, 2012, but the tax collection process could not start due to the absence of relevant rules.
 
The NCCPL was appointed the CGT collecting agent on behalf of Federal Board of Revenue to avoid direct interaction of tax officers with investors. The NCCPL had developed an automated system to collect CGT from the market participants. Presently, only two taxes namely CVT on sale and purchase of shares at the rate of 0.01 percent and FED on commission at the rate of 16 percent are being collected on share trading.
Title: Re: CGT -- Capital Gains Tax
Post by: space on September 02, 2012, 06:29:04 PM
CGT 10% to be collected on the total sale amount ? or on the actual capital gain ?

eg: I buy a stock for rs 100 +.05 paisa commision +.03 paisa cvt and tax on commission my cost = 100.08
      I sell that stock net capital gain = rs1, would i pay 10 paisa as cgt or 101.08*.1 = rs10.11 therefore incurring a huge loss ?

I guess I would pay 10 paisa, otherwise day trading would be impossible because upper limit at KSE is 5%, but someone please confirm this. This will make day trading more expensive, stupid govt must steal from pennies we try to scrape  huhu huhu huhu

I realize its a stupid question because the words CAPITAL GAINS mean profit part of the sale, but still, Pakistan is being governed by corrupt looters so thought I should confirm.
Title: Re: CGT -- Capital Gains Tax
Post by: sanwar on September 02, 2012, 06:44:00 PM
CGT 10% to be collected on the total sale amount ? or on the actual capital gain ?

eg: I buy a stock for rs 100 +.05 paisa commision +.03 paisa cvt and tax on commission my cost = 100.08
      I sell that stock net capital gain = rs1, would i pay 10 paisa as cgt or 101.08*.1 = rs10.11 therefore incurring a huge loss ?

I guess I would pay 10 paisa, otherwise day trading would be impossible because upper limit at KSE is 5%, but someone please confirm this. This will make day trading more expensive, stupid govt must steal from pennies we try to scrape  huhu huhu huhu

I realize its a stupid question because the words CAPITAL GAINS mean profit part of the sale, but still, Pakistan is being governed by corrupt looters so thought I should confirm.

@Space bhai, you later interpretation sounds more logical... it should be on the "gain" instead of "investment+gain"...

Title: Re: CGT -- Capital Gains Tax
Post by: stockz_123 on September 02, 2012, 07:10:52 PM
CGT 10% to be collected on the total sale amount ? or on the actual capital gain ?

eg: I buy a stock for rs 100 +.05 paisa commision +.03 paisa cvt and tax on commission my cost = 100.08
      I sell that stock net capital gain = rs1, would i pay 10 paisa as cgt or 101.08*.1 = rs10.11 therefore incurring a huge loss ?

I guess I would pay 10 paisa, otherwise day trading would be impossible because upper limit at KSE is 5%, but someone please confirm this. This will make day trading more expensive, stupid govt must steal from pennies we try to scrape  huhu huhu huhu

I realize its a stupid question because the words CAPITAL GAINS mean profit part of the sale, but still, Pakistan is being governed by corrupt looters so thought I should confirm.

@Space bhai, you later interpretation sounds more logical... it should be on the "gain" instead of "investment+gain"...

cgt is on the capital gains.
Title: Re: CGT -- Capital Gains Tax
Post by: Dehan on September 02, 2012, 11:02:23 PM
CGT 10% to be collected on the total sale amount ? or on the actual capital gain ?

eg: I buy a stock for rs 100 +.05 paisa commision +.03 paisa cvt and tax on commission my cost = 100.08
      I sell that stock net capital gain = rs1, would i pay 10 paisa as cgt or 101.08*.1 = rs10.11 therefore incurring a huge loss ?

I guess I would pay 10 paisa, otherwise day trading would be impossible because upper limit at KSE is 5%, but someone please confirm this. This will make day trading more expensive, stupid govt must steal from pennies we try to scrape  huhu huhu huhu

I realize its a stupid question because the words CAPITAL GAINS mean profit part of the sale, but still, Pakistan is being governed by corrupt looters so thought I should confirm.

@Space bhai, you later interpretation sounds more logical... it should be on the "gain" instead of "investment+gain"...

cgt is on the capital gains.

FBR has already issued an SRO "Special Provisions relating to Capital Gain" on  July 20, 2012 which is available at the website of the FBR the link of which is as under:
 
http://www.fbr.gov.pk/SROs/201272611725363412012sro902.doc
Title: Re: CGT -- Capital Gains Tax
Post by: hisham on September 03, 2012, 11:07:53 AM
CGT 10% to be collected on the total sale amount ? or on the actual capital gain ?

eg: I buy a stock for rs 100 +.05 paisa commision +.03 paisa cvt and tax on commission my cost = 100.08
      I sell that stock net capital gain = rs1, would i pay 10 paisa as cgt or 101.08*.1 = rs10.11 therefore incurring a huge loss ?

I guess I would pay 10 paisa, otherwise day trading would be impossible because upper limit at KSE is 5%, but someone please confirm this. This will make day trading more expensive, stupid govt must steal from pennies we try to scrape  huhu huhu huhu

I realize its a stupid question because the words CAPITAL GAINS mean profit part of the sale, but still, Pakistan is being governed by corrupt looters so thought I should confirm.

@Space bhai, you later interpretation sounds more logical... it should be on the "gain" instead of "investment+gain"...

cgt is on the capital gains.

The looters have invested a lot of black money in the stock market to turn it white. Don't expect too much taxation here  ;)
Title: Re: CGT -- Capital Gains Tax
Post by: SBM on September 07, 2012, 05:10:55 PM
http://www.brecorder.com/top-news/108-pakistan-top-news/77776-cgt-implementation-from-next-week-chairman-secp.html

ISLAMABAD: The rules of Capital Gain Tax (CGT) have been approved and will be implemented on transaction of shares by the next week after the final approval from the Federal Board of Revenue (FBR).
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on September 13, 2012, 11:26:11 AM
FBR issues CGT Rules on security trading (BR)
The Federal Board of Revenue (FBR) issued the much?awaited CGT Rules on Securities’ Trading
on Wednesday, incorporating all amendments proposed by the SECP aimed at facilitating the
investors. The SECP had recommended certain changes in the CGT rules for documentary trail of
undocumented income, correction of anomaly where exempted gains in past were not
documented, improving depth in trading volumes, higher possibility for privatization and
attraction of foreign portfolio investment. After approval of rules, the CGT regime has
reportedly become effective. In the first phase, the National Clearing Company of Pakistan will
provide details of tax computation during the period of 24th April to 30th July to clearing
members for verification. The details of computation for the period from 1st July onward will be
provided by month?end.
Title: Re: CGT -- Capital Gains Tax
Post by: SBM on September 13, 2012, 09:35:01 PM
Dear Sir,

This is with reference to the NCCPL notice dated September 12, 2012 (notice attached).

As per the notice, CGT system is being implemented from today September 13, 2012. NCCPL has provided CGT computation data for the trades executed and settled during period April 24, 2012 to June 30, 2012 to be deducted from respective clients.

Tax Liability (if any) for the aforementioned period will be deducted from your KASB Direct trading account.

For any further queries, please do not hesitate to call us on 0800-52722 / 111-222-001 or email us at
Title: Re: CGT -- Capital Gains Tax
Post by: SBM on September 13, 2012, 09:39:47 PM
National Clearing Company of Pakistan Limited
8th Floor, Karachi Stock Exchange Building, Stock Exchange Road, Karachi
NCCPL/CM/September-12/04
September 12, 2012

Computation, Determination and Collection of Capital Gain Tax by NCCPL
in accordance with the Income Tax Ordinance, 2001 and Rules made thereunder

Dear Clearing Members,
This is with reference to the amendments made in the Income Tax Ordinance, 2001(“Ordinance”)
and the Income Tax Rules, 2002 (“Rules”) made thereunder, relating to Capital Gain Tax (“CGT”)
by the Federal Board of Revenue (“FBR”). The notification in this respect will soon be published
on FBR website. 
In accordance with the Ordinance and Rules, the National Clearing Company of Pakistan Limited
(“NCCPL”) has been entrusted to compute, determine, collect and deposit CGT from disposal of
listed securities in the manner laid down in the Rules. Accordingly, NCCPL has developed a capital
gain tax system (“CGT System”) so as to compute and determine capital gain & loss and to collect
tax thereon from respective Clearing Members for their proprietary and clients’ trades/transactions.
We are pleased to inform you that, the  aforementioned  CGT System shall be  implemented on
Thursday, September 13, 2012. Since, the effective date of new CGT regime is April 24, 2012;
the NCCPL, in first phase, shall provide details of CGT computation for  trades/transactions
executed  and settled  during the  period April 24, 2012 to June 30, 2012 to all relevant Clearing
Members for their review and verification.
Clearing Members are therefore requested to verify client/proprietary account wise details of capital
gain or loss and tax thereon, if any, through the following reports/download:

I. CGT Consolidated Summary; and
II. CGT Gain Loss Details

Accordingly, the collective amount of CGT, for the period April 24, 2012 to June 30, 2012, would
be collected on Tuesday September 18, 2012 through respective settling banks of the Clearing
Members. You are hereby requested to ensure requisite amount in your settling bank’s account.
In
case of none or partial collection of amount of CGT, necessary action would be taken in accordance
with the Rules and NCCPL Regulations.National Clearing Company of Pakistan Limited
8th Floor, Karachi Stock Exchange Building, Stock Exchange Road, Karachi

In order to access CGT System and aforementioned reports, Clearing Members  are requested to
log-on through the following URL from their National Clearing and Settlement System (“NCSS”)
terminals with their existing USER IDs and Passwords:
http://cgt.nccpl.pk:9889/CGTS.jsp

The details of CGT computation for the period from July 01, 2012 onwards shall be provided to
Clearing Members by the end of September 2012.

For any further queries or concerns, please feel free to contact the Customer Support Services of
your respective locations.

City Telephone Number Fax Number Email
Karachi 021-32460811-19 021-32460827 helpdesk@nccpl.pk
Lahore 042-36280815-7 042-36280818 helpdesk@nccpl.pk
Islamabad 051-2895460-62 051-2895463 helpdesk@nccpl.pk
Regards,
______-sd-______   
Badiuddin Akber
Chief Operating Officer
Cc:
1. Director (PRDD) Securities and Exchange Commission of Pakistan - Islamabad
2. Director (MSCID) Securities and Exchange Commission of Pakistan – Islamabad
3. Member Inland Revenue – Federal Board of Revenue
4. Managing Director - The Karachi Stock Exchange Limited
5. Managing Director - The Lahore Stock Exchange Limited
6. Managing Director - The Islamabad Stock Exchange Limited
7. Chief Executive Officer - Central Depository Company of Pakistan Limited
Title: Re: CGT -- Capital Gains Tax
Post by: SBM on September 13, 2012, 09:42:13 PM
if clearing member (broker) needs to have balance by 18 september that means they will take money from us (customers) before that date ... Anyone else received this notice from their broker ? Will we need to have cash in our trading accounts ? hmm
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on September 13, 2012, 10:32:57 PM
Dear Sir,

This is with reference to the NCCPL notice dated September 12, 2012 (notice attached).

As per the notice, CGT system is being implemented from today September 13, 2012. NCCPL has provided CGT computation data for the trades executed and settled during period April 24, 2012 to June 30, 2012 to be deducted from respective clients.

Tax Liability (if any) for the aforementioned period will be deducted from your KASB Direct trading account.

Warm Regards,

KASB DIRECT- an Online Division of

KASB Securities Ltd
Title: Re: CGT -- Capital Gains Tax
Post by: Muhammad Fahad on September 14, 2012, 09:45:05 PM
Dear,

You may be aware of the fact that the Capital Gain Tax (CGT) on sale of listed securities was imposed in the Federal Budget for the year 2010-11 and has been applicable on sale of all securities sold on or after July 01, 2010. Initially, the liability to pay the due tax on capital gain was on the investor who held the securities during the period for which tax on capital gain had to be paid. However, after the promulgation of FINANCE (AMENDMENT) ORDINANCE, 2012 and FINANCE ACT 2012, the National Clearing Company of Pakistan Limited (NCCPL) has been entrusted upon with the responsibility to compute, determine, collect and deposit CGT in accordance with the amendments made in the Income Tax Ordinance, 2001.
 
The NCCPL has been given this responsibility to facilitate the investors as majority of the investors were unable to clear their CGT liabilities either due to complex procedure involved or lack of understanding about the earlier mechanism. The decision has been taken after detailed deliberations between the members of the exchanges, the managements of the exchanges, the SECP and the FBR.
 
Eversince, the decision that NCCPL will deduct the CGT has been taken, the market has shown significant improvement, both in terms of index as well as traded volumes as it has simplified the procedure and investors are no more required to make any direct contact with the FBR for depositing their CGT on all their future transactions; thus eliminating all doubts and ambiguities which were created in the minds investors a couple of years ago, when CGT was imposed.

You may view the relevant details in the following documents:
 ·         Finance (Amendment) Ordinance 2012
 ·         Amendment in Income Tax Rule 2002
·         Presentation – New Regime of Capital Gain Tax (“CGT”)
 Now, in light of the above regulatory changes, AKD Trade will apply the CGT Policy on all AKD Trade accounts as per the following regime:

 1.       CGT applicable on all transactions carried out between April 24, 2012 and June 30, 2012 (both days inclusive) will be deducted by Monday, September 17, 2012.

2.       CGT applicable on all transactions carried out between July 01, 2012 and September 30, 2012 (both days inclusive) will be deducted by the end of September.

3.       CGT applicable on all transactions carried out on or after October 01, 2012 will be deducted on daily basis and adjustments will be made on monthly basis at the end of every month.

4.       The liability to pay the due CGT applicable on all transactions carried out prior to April 24, 2012 remains upon the investor him/herself. We may provide you the CGT Report for the desired period subject to a formal request from your side. 

5.       A minimum balance of Rs 5000/- has to be maintained in all AKD Trade accounts at all times. However, any AKD Trade account holder wishing to close his/her AKD Trade account or withdraw his/her full account balance, will be required to produce a Tax Clearance Certificate as per the CGT Rules and Regulations.
 
We hope that you will understand the above scenarios, however, if you have any queries or require further explanation, please do not hesitate to contact us at our Call Centre UAN: 111-253-253 or email us at info@akdtrade.com
Title: Re: CGT -- Capital Gains Tax
Post by: Dehan on September 15, 2012, 10:55:37 AM
Dear,

You may be aware of the fact that the Capital Gain Tax (CGT) on sale of listed securities was imposed in the Federal Budget for the year 2010-11 and has been applicable on sale of all securities sold on or after July 01, 2010. Initially, the liability to pay the due tax on capital gain was on the investor who held the securities during the period for which tax on capital gain had to be paid. However, after the promulgation of FINANCE (AMENDMENT) ORDINANCE, 2012 and FINANCE ACT 2012, the National Clearing Company of Pakistan Limited (NCCPL) has been entrusted upon with the responsibility to compute, determine, collect and deposit CGT in accordance with the amendments made in the Income Tax Ordinance, 2001.
 
The NCCPL has been given this responsibility to facilitate the investors as majority of the investors were unable to clear their CGT liabilities either due to complex procedure involved or lack of understanding about the earlier mechanism. The decision has been taken after detailed deliberations between the members of the exchanges, the managements of the exchanges, the SECP and the FBR.
 
Eversince, the decision that NCCPL will deduct the CGT has been taken, the market has shown significant improvement, both in terms of index as well as traded volumes as it has simplified the procedure and investors are no more required to make any direct contact with the FBR for depositing their CGT on all their future transactions; thus eliminating all doubts and ambiguities which were created in the minds investors a couple of years ago, when CGT was imposed.

You may view the relevant details in the following documents:
 ·         Finance (Amendment) Ordinance 2012
 ·         Amendment in Income Tax Rule 2002
·         Presentation – New Regime of Capital Gain Tax (“CGT”)
 Now, in light of the above regulatory changes, AKD Trade will apply the CGT Policy on all AKD Trade accounts as per the following regime:

 1.       CGT applicable on all transactions carried out between April 24, 2012 and June 30, 2012 (both days inclusive) will be deducted by Monday, September 17, 2012.

2.       CGT applicable on all transactions carried out between July 01, 2012 and September 30, 2012 (both days inclusive) will be deducted by the end of September.

3.       CGT applicable on all transactions carried out on or after October 01, 2012 will be deducted on daily basis and adjustments will be made on monthly basis at the end of every month.

4.       The liability to pay the due CGT applicable on all transactions carried out prior to April 24, 2012 remains upon the investor him/herself. We may provide you the CGT Report for the desired period subject to a formal request from your side. 

5.       A minimum balance of Rs 5000/- has to be maintained in all AKD Trade accounts at all times. However, any AKD Trade account holder wishing to close his/her AKD Trade account or withdraw his/her full account balance, will be required to produce a Tax Clearance Certificate as per the CGT Rules and Regulations.
 
We hope that you will understand the above scenarios, however, if you have any queries or require further explanation, please do not hesitate to contact us at our Call Centre UAN: 111-253-253 or email us at info@akdtrade.com

Below is the link of SRO issued by the FBR inrespect of CGT. One should go through it.

http://www.fbr.gov.pk/SROs/20129131591719312SRO1119(I)2012.doc
Title: Re: CGT -- Capital Gains Tax
Post by: Tezihunt on September 17, 2012, 06:55:51 PM
Collection of CGT from monday 24/9/12 instead of 18/9

http://www.kse.com.pk/phps/index1.php# (http://www.kse.com.pk/phps/index1.php#)
Title: Re: CGT -- Capital Gains Tax
Post by: Dehan on September 17, 2012, 07:01:39 PM
Collection of CGT from monday 24/9/12 instead of 18/9

http://www.kse.com.pk/phps/index1.php# (http://www.kse.com.pk/phps/index1.php#)

Brokers have started collecting CGT from investors. This date is for the brokers to depsit the same to NCCP.
Title: Re: CGT -- Capital Gains Tax
Post by: jays on September 19, 2012, 12:49:06 AM
If anybody requires advice in relation to tax matters, can contact at jalalkarim91@hotmail.com



CGT 10% to be collected on the total sale amount ? or on the actual capital gain ?

eg: I buy a stock for rs 100 +.05 paisa commision +.03 paisa cvt and tax on commission my cost = 100.08
      I sell that stock net capital gain = rs1, would i pay 10 paisa as cgt or 101.08*.1 = rs10.11 therefore incurring a huge loss ?

I guess I would pay 10 paisa, otherwise day trading would be impossible because upper limit at KSE is 5%, but someone please confirm this. This will make day trading more expensive, stupid govt must steal from pennies we try to scrape  huhu huhu huhu

I realize its a stupid question because the words CAPITAL GAINS mean profit part of the sale, but still, Pakistan is being governed by corrupt looters so thought I should confirm.

@Space bhai, you later interpretation sounds more logical... it should be on the "gain" instead of "investment+gain"...
Title: Re: CGT -- Capital Gains Tax
Post by: Tezihunt on September 19, 2012, 07:05:02 AM
If anybody requires advice in relation to tax matters, can contact at jalalkarim91@hotmail.com

Is it paid service or free guidence?
Title: Re: CGT -- Capital Gains Tax
Post by: asim.786 on September 19, 2012, 08:10:07 AM
I think only CGT will be aplicable on amount after minus loss from profit in specific period I e:  I got share A @ 100 Rs and share B @ 150 Rs and sell A@110Rs profit 10Rs and sell B @ 155r loss 5Rs    So your final profit is 10-5=5Rs.           Now cgt will be applicable on Rs 5.  Which is 10% of Rs 5 = CGT=0.50paisa
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on September 19, 2012, 02:50:34 PM
(http://www.kse.com.pk/newsimage/036267-1.gif)

http://www.kse.com.pk/notices-updates/detail2.php?id=4&nid=036267&pagesize=1&pageno=1
Title: Re: CGT -- Capital Gains Tax
Post by: jays on September 19, 2012, 11:17:51 PM
free advice
If anybody requires advice in relation to tax matters, can contact at jalalkarim91@hotmail.com

Is it paid service or free guidence?
Title: Re: CGT -- Capital Gains Tax
Post by: asim.786 on September 19, 2012, 11:27:40 PM

Re: CGT -- Capital Gains Tax
« Reply #605 on: Today at 11:24:45 PM »
QuoteAdd Multi QuoteModify
I think only CGT will be aplicable on amount after minus loss from profit in specific period I e:  I got share A @ 100 Rs and share B @ 150 Rs and sell A@110Rs profit 10Rs and sell B @ 145Rs loss 5Rs    So your final profit is 10-5=5Rs.           Now cgt will be applicable on Rs 5.  Which will be 10% of Rs 5 = CGT=0.50paisa
Title: Re: CGT -- Capital Gains Tax
Post by: jays on September 20, 2012, 11:13:26 PM
bilkul sahi hai
loss of same year will be less from profit and then tax will be calculated on remaining profit

Re: CGT -- Capital Gains Tax
« Reply #605 on: Today at 11:24:45 PM »
QuoteAdd Multi QuoteModify
I think only CGT will be aplicable on amount after minus loss from profit in specific period I e:  I got share A @ 100 Rs and share B @ 150 Rs and sell A@110Rs profit 10Rs and sell B @ 145Rs loss 5Rs    So your final profit is 10-5=5Rs.           Now cgt will be applicable on Rs 5.  Which will be 10% of Rs 5 = CGT=0.50paisa
Title: Re: CGT -- Capital Gains Tax
Post by: kamalia on September 25, 2012, 12:32:27 AM
Hi,

Does anyone know if there is an SRO for not showing the source of income when investing in shares. I read it somewhere that u dont need to tell about the source  if the investment has taken place in shares.

Thanks
Title: Re: CGT -- Capital Gains Tax
Post by: KSE Investor on September 25, 2012, 02:24:00 AM
Hi,

Does anyone know if there is an SRO for not showing the source of income when investing in shares. I read it somewhere that u dont need to tell about the source  if the investment has taken place in shares.

Thanks

Please go through the Presedential order dated 24.04.2012 & subsequent SRO902(1)2012 dated 20.7.2012 available at Federal Board of Revenue website.
Title: Re: CGT -- Capital Gains Tax
Post by: Dehan on September 26, 2012, 12:12:08 AM
Hi,

Does anyone know if there is an SRO for not showing the source of income when investing in shares. I read it somewhere that u dont need to tell about the source  if the investment has taken place in shares.

Thanks

Please go through the Presedential order dated 24.04.2012 & subsequent SRO902(1)2012 dated 20.7.2012 available at Federal Board of Revenue website.

The investments made prior to 24-04-2012, and remained invested for a period of 45 days and the investments made on or after 24-04-2012 and remained invested for a period of 120 days, the source of income shall not be asked by the FBR. The link of SRO is:

http://www.fbr.gov.pk/SROs/20129131591719312SRO1119(I)2012.doc
Title: Re: CGT -- Capital Gains Tax
Post by: ihashishin on September 26, 2012, 12:56:36 PM
i have a couple of questions regarding the cgt, been trying to ask igi but they seem to be clueless

1. when will nccpl deduct the tax from my broker account?
as far as i can figure out it seems to be delayed and they will now be doing it from the next fiscal year (1july2012 onwards), is this correct?

2. also if they are deducting it from my account am i meant to only calculate the capital gains from 1july2011 to 23april2012 for my full year taxes due now? and what about if there is a difference between the two periods eg. loss in first (july11 to april12 )and gain in second (april12 to june12) - then am i meant to get no benefit from writing off the gain against the loss?
someone told me that if there is a difference it doesnt matter we will have to pay nccpl for the second period and if there is a loss in the first period we will have to get the refund back from the respective RTO (and we all know what getting money out of an RTO is like - impossible!)

3. anyone using igi get the letter they said they dispatched on the 13 of september?
Title: Re: CGT -- Capital Gains Tax
Post by: kamalia on September 26, 2012, 08:02:46 PM
thanks :)
Title: Re: CGT -- Capital Gains Tax
Post by: Dehan on September 26, 2012, 09:06:23 PM
i have a couple of questions regarding the cgt, been trying to ask igi but they seem to be clueless

1. when will nccpl deduct the tax from my broker account?
as far as i can figure out it seems to be delayed and they will now be doing it from the next fiscal year (1july2012 onwards), is this correct?

2. also if they are deducting it from my account am i meant to only calculate the capital gains from 1july2011 to 23april2012 for my full year taxes due now? and what about if there is a difference between the two periods eg. loss in first (july11 to april12 )and gain in second (april12 to june12) - then am i meant to get no benefit from writing off the gain against the loss?
someone told me that if there is a difference it doesnt matter we will have to pay nccpl for the second period and if there is a loss in the first period we will have to get the refund back from the respective RTO (and we all know what getting money out of an RTO is like - impossible!)

3. anyone using igi get the letter they said they dispatched on the 13 of september?

The brokers have started deducting CGT from the investors. NCCP has provided a software for the purpose. The CGT rate is 10% for the the securites held for less than 6 months and it is 8% for the period more than 6 months but less than 12 months. No CGT is applicable for the period more than one year. Securites held on 23-04-2011 shall b treated to b held for a period of more than one year. Please go through the Clasue 23 of the SRO  and u will find all ur answers of ur questions link is givin below:
http://www.fbr.gov.pk/SROs/20129131591719312SRO1119(I)2012.doc
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on October 16, 2012, 09:47:27 AM

Dear Sir,

This is with reference to the NCCPL notice dated October 12, 2012 (notice attached).

As per the notice, NCCPL has provided CGT computation data for the trades executed and settled during period July 01, 2012 to September 30, 2012 to be deducted from respective clients.

Tax Liability (if any) for the aforementioned period will be deducted from your KASB Direct trading account.

Also please note that NCCPL has imposed CGT Calculation Fee. For the period from 24th, April to 30th, June 2012.

 This fee will also be deducted from your KASB Direct accounts along with the CGT. Calculation Fee for the period from July to Sept 2012 will be deducted from your accounts in due course.

For any further queries, please do not hesitate to call us on 0800-52722 / 111-222-001 or email us at kasbdirect@kasb.com

Warm Regards,

KASB DIRECT
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on October 17, 2012, 09:46:36 AM

CGT collection on shares: NCCPL imposes service charges
Wednesday, 17 October 2012 09:25
Posted by Imaduddin
AHMED MALIK

KARACHI: The National Clearing Company of Pakistan Limited (NCCPL) has imposed Rs 3 per Rs 100,000 as service charges on Capital Gain Tax (CGT) calculation on share trading. The NCCPL has charged/deducted total amount of its service charges applicable for the period from April to June 2012.

Sources said that the NCCPL has collected around Rs 2 million as service charges on CGT calculation for the said three month period.

The service charges for the remaining period would be charged/deducted once the calculation of CGT for the said period completes, sources said. 

Sources said the NCCPL board would discuss the issue of service charges on CGT in its upcoming meeting to be held on October 31, 2012. It is expected that the rate of service charges would be reduced from the existing level of 0.003 percent.  The NCCPL was appointed tax collection agent by the government after imposition of CGT on share trading.
Title: Re: CGT -- Capital Gains Tax
Post by: kpall99 on October 17, 2012, 04:44:04 PM
Yar yeh fees kahan se a gae? Now we have to pay CGT as well as the computation fees. The Government has appointed NCCPL as agent so they have to pay the fees. Now brokers will also charge for sending CGT reports to the Client.

I have not gained a single rupee during last 3 months and I am in loss of 0.2 million but still I have to pay every month as a computation fees? KSE ke azmat ko salam.


CGT collection on shares: NCCPL imposes service charges
Wednesday, 17 October 2012 09:25
Posted by Imaduddin
AHMED MALIK

KARACHI: The National Clearing Company of Pakistan Limited (NCCPL) has imposed Rs 3 per Rs 100,000 as service charges on Capital Gain Tax (CGT) calculation on share trading. The NCCPL has charged/deducted total amount of its service charges applicable for the period from April to June 2012.

Sources said that the NCCPL has collected around Rs 2 million as service charges on CGT calculation for the said three month period.

The service charges for the remaining period would be charged/deducted once the calculation of CGT for the said period completes, sources said. 

Sources said the NCCPL board would discuss the issue of service charges on CGT in its upcoming meeting to be held on October 31, 2012. It is expected that the rate of service charges would be reduced from the existing level of 0.003 percent.  The NCCPL was appointed tax collection agent by the government after imposition of CGT on share trading.


Title: Re: CGT -- Capital Gains Tax
Post by: kpall99 on October 17, 2012, 05:02:04 PM
My broker has deducted 800 rupees as a computation fees since April 2012. So you gain or not a fixed amount of money will be deducted. Message is clear, you will be punished for investing in KSE.  huhu

Yar yeh fees kahan se a gae? Now we have to pay CGT as well as the computation fees. The Government has appointed NCCPL as agent so they have to pay the fees. Now brokers will also charge for sending CGT reports to the Client.

I have not gained a single rupee during last 3 months and I am in loss of 0.2 million but still I have to pay every month as a computation fees? KSE ke azmat ko salam.


CGT collection on shares: NCCPL imposes service charges
Wednesday, 17 October 2012 09:25
Posted by Imaduddin
AHMED MALIK

KARACHI: The National Clearing Company of Pakistan Limited (NCCPL) has imposed Rs 3 per Rs 100,000 as service charges on Capital Gain Tax (CGT) calculation on share trading. The NCCPL has charged/deducted total amount of its service charges applicable for the period from April to June 2012.

Sources said that the NCCPL has collected around Rs 2 million as service charges on CGT calculation for the said three month period.

The service charges for the remaining period would be charged/deducted once the calculation of CGT for the said period completes, sources said. 

Sources said the NCCPL board would discuss the issue of service charges on CGT in its upcoming meeting to be held on October 31, 2012. It is expected that the rate of service charges would be reduced from the existing level of 0.003 percent.  The NCCPL was appointed tax collection agent by the government after imposition of CGT on share trading.




Title: Re: CGT -- Capital Gains Tax
Post by: Dehan on October 17, 2012, 06:08:14 PM
My broker has deducted 800 rupees as a computation fees since April 2012. So you gain or not a fixed amount of money will be deducted. Message is clear, you will be punished for investing in KSE.  huhu

Yar yeh fees kahan se a gae? Now we have to pay CGT as well as the computation fees. The Government has appointed NCCPL as agent so they have to pay the fees. Now brokers will also charge for sending CGT reports to the Client.

I have not gained a single rupee during last 3 months and I am in loss of 0.2 million but still I have to pay every month as a computation fees? KSE ke azmat ko salam.


CGT collection on shares: NCCPL imposes service charges
Wednesday, 17 October 2012 09:25
Posted by Imaduddin
AHMED MALIK

KARACHI: The National Clearing Company of Pakistan Limited (NCCPL) has imposed Rs 3 per Rs 100,000 as service charges on Capital Gain Tax (CGT) calculation on share trading. The NCCPL has charged/deducted total amount of its service charges applicable for the period from April to June 2012.

Sources said that the NCCPL has collected around Rs 2 million as service charges on CGT calculation for the said three month period.

The service charges for the remaining period would be charged/deducted once the calculation of CGT for the said period completes, sources said. 

Sources said the NCCPL board would discuss the issue of service charges on CGT in its upcoming meeting to be held on October 31, 2012. It is expected that the rate of service charges would be reduced from the existing level of 0.003 percent.  The NCCPL was appointed tax collection agent by the government after imposition of CGT on share trading.




0.003% on what? Gain/loss or investment.
Title: Re: CGT -- Capital Gains Tax
Post by: kpall99 on October 17, 2012, 09:39:06 PM
On the Investment and apparently the current value of the investment. Doesn't matter you gained anything or not but you have to pay...


My broker has deducted 800 rupees as a computation fees since April 2012. So you gain or not a fixed amount of money will be deducted. Message is clear, you will be punished for investing in KSE.  huhu

Yar yeh fees kahan se a gae? Now we have to pay CGT as well as the computation fees. The Government has appointed NCCPL as agent so they have to pay the fees. Now brokers will also charge for sending CGT reports to the Client.

I have not gained a single rupee during last 3 months and I am in loss of 0.2 million but still I have to pay every month as a computation fees? KSE ke azmat ko salam.


CGT collection on shares: NCCPL imposes service charges
Wednesday, 17 October 2012 09:25
Posted by Imaduddin
AHMED MALIK

KARACHI: The National Clearing Company of Pakistan Limited (NCCPL) has imposed Rs 3 per Rs 100,000 as service charges on Capital Gain Tax (CGT) calculation on share trading. The NCCPL has charged/deducted total amount of its service charges applicable for the period from April to June 2012.

Sources said that the NCCPL has collected around Rs 2 million as service charges on CGT calculation for the said three month period.

The service charges for the remaining period would be charged/deducted once the calculation of CGT for the said period completes, sources said. 

Sources said the NCCPL board would discuss the issue of service charges on CGT in its upcoming meeting to be held on October 31, 2012. It is expected that the rate of service charges would be reduced from the existing level of 0.003 percent.  The NCCPL was appointed tax collection agent by the government after imposition of CGT on share trading.




0.003% on what? Gain/loss or investment.

Title: Re: CGT -- Capital Gains Tax
Post by: space on October 18, 2012, 01:42:01 AM
On the Investment and apparently the current value of the investment. Doesn't matter you gained anything or not but you have to pay...


My broker has deducted 800 rupees as a computation fees since April 2012. So you gain or not a fixed amount of money will be deducted. Message is clear, you will be punished for investing in KSE.  huhu

Yar yeh fees kahan se a gae? Now we have to pay CGT as well as the computation fees. The Government has appointed NCCPL as agent so they have to pay the fees. Now brokers will also charge for sending CGT reports to the Client.

I have not gained a single rupee during last 3 months and I am in loss of 0.2 million but still I have to pay every month as a computation fees? KSE ke azmat ko salam.


CGT collection on shares: NCCPL imposes service charges
Wednesday, 17 October 2012 09:25
Posted by Imaduddin
AHMED MALIK

KARACHI: The National Clearing Company of Pakistan Limited (NCCPL) has imposed Rs 3 per Rs 100,000 as service charges on Capital Gain Tax (CGT) calculation on share trading. The NCCPL has charged/deducted total amount of its service charges applicable for the period from April to June 2012.

Sources said that the NCCPL has collected around Rs 2 million as service charges on CGT calculation for the said three month period.

The service charges for the remaining period would be charged/deducted once the calculation of CGT for the said period completes, sources said. 

Sources said the NCCPL board would discuss the issue of service charges on CGT in its upcoming meeting to be held on October 31, 2012. It is expected that the rate of service charges would be reduced from the existing level of 0.003 percent.  The NCCPL was appointed tax collection agent by the government after imposition of CGT on share trading.




0.003% on what? Gain/loss or investment.
even if it is on investment value, pkr 800 computation fees means you did PKR 26,666,666 ka turnover i.e 5.3m per month since april, so big deal you pay 160 a month for doing 5.3m ki trades. I dont agree with this charge but in the greater scheme of things if you can do 5.3m per month buy sell, then you can certainly afford Pkr 160/- I mean so you eat one chicken tikka less ;) at an average rs100 per share you pay 10 paisa commisions so 5.3m/100 = 5300 a month in brokerage fees, just add 160 to it.
Title: Re: CGT -- Capital Gains Tax
Post by: kpall99 on October 18, 2012, 11:12:57 AM
Space it is not on trade. It is on actual value of the money or shares value. The amount per month does not matter, what matters is you are already in loss and still you have to pay..

On the Investment and apparently the current value of the investment. Doesn't matter you gained anything or not but you have to pay...


My broker has deducted 800 rupees as a computation fees since April 2012. So you gain or not a fixed amount of money will be deducted. Message is clear, you will be punished for investing in KSE.  huhu

Yar yeh fees kahan se a gae? Now we have to pay CGT as well as the computation fees. The Government has appointed NCCPL as agent so they have to pay the fees. Now brokers will also charge for sending CGT reports to the Client.

I have not gained a single rupee during last 3 months and I am in loss of 0.2 million but still I have to pay every month as a computation fees? KSE ke azmat ko salam.


CGT collection on shares: NCCPL imposes service charges
Wednesday, 17 October 2012 09:25
Posted by Imaduddin
AHMED MALIK

KARACHI: The National Clearing Company of Pakistan Limited (NCCPL) has imposed Rs 3 per Rs 100,000 as service charges on Capital Gain Tax (CGT) calculation on share trading. The NCCPL has charged/deducted total amount of its service charges applicable for the period from April to June 2012.

Sources said that the NCCPL has collected around Rs 2 million as service charges on CGT calculation for the said three month period.

The service charges for the remaining period would be charged/deducted once the calculation of CGT for the said period completes, sources said. 

Sources said the NCCPL board would discuss the issue of service charges on CGT in its upcoming meeting to be held on October 31, 2012. It is expected that the rate of service charges would be reduced from the existing level of 0.003 percent.  The NCCPL was appointed tax collection agent by the government after imposition of CGT on share trading.




0.003% on what? Gain/loss or investment.
even if it is on investment value, pkr 800 computation fees means you did PKR 26,666,666 ka turnover i.e 5.3m per month since april, so big deal you pay 160 a month for doing 5.3m ki trades. I dont agree with this charge but in the greater scheme of things if you can do 5.3m per month buy sell, then you can certainly afford Pkr 160/- I mean so you eat one chicken tikka less ;) at an average rs100 per share you pay 10 paisa commisions so 5.3m/100 = 5300 a month in brokerage fees, just add 160 to it.

Title: Re: CGT -- Capital Gains Tax
Post by: space on October 18, 2012, 08:12:54 PM
Space it is not on trade. It is on actual value of the money or shares value. The amount per month does not matter, what matters is you are already in loss and still you have to pay..


Yes buddy I realize its on the money or shares value, which is the same as trade value, i.e you buy 1000 shares at rs 100 per share you are out 100000 cash, you sell it for 101000 (profit of 1 per share) or 99000 (loss of 1 per share) that is a trade size of 201000 or 199000 on that you will pay PRK6.03  or 5.97 as calculation fees, regardless of loss or profit, my point is, the amount is not huge even if its unfair, and Rs 800 in calculation fee means you did trade worth PKR 26.66m, and someone who does 26m trade should really not have an issue with the tiny sum of PKR 800, even though I agree its an unfair burden, but it is too small a burden
Title: Re: CGT -- Capital Gains Tax
Post by: SBM on November 20, 2012, 12:32:09 AM
Accordingly, the aggregate amount of CGT, for the period October 01, 2012 to October 31, 2012,
would be collected on  Monday November 26, 2012 through respective settling banks of the
Clearing Members, along with the refund or adjustment on the basis of amount collected till
September 30, 2012.

http://www.kse.com.pk/newsimage/038924-1.pdf
Title: Re: CGT -- Capital Gains Tax
Post by: SBM on November 21, 2012, 12:14:39 PM
Dear Sir,

This is with reference to the NCCPL notice dated November 16, 2012 (notice attached).

As per the notice, NCCPL has provided CGT computation data for the trades executed and settled during period October 01, 2012 to October 31, 2012 to be deducted from respective clients.

Tax Liability (if any) for the aforementioned period have been deducted from your KASB Direct trading account.

Also please note that NCCPL has imposed CGT Calculation Fee. This fee will also be deducted from your KASB Direct accounts along with the CGT. Calculation Fee for the period from July to October 2012 will be deducted from your accounts in due course.

For any further queries, please do not hesitate to call us on 0800-52722 / 111-222-001 or email us at

kasbdirect@kasb.com

Warm Regards,
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on November 23, 2012, 09:48:41 AM
This email is to inform you that NCCPL will collect your new payable CGT amount for October, 2012 on November 26, 2012 (Monday) from the respective clearing members.
Title: Re: CGT -- Capital Gains Tax
Post by: SBM on December 10, 2012, 05:55:01 PM
Dear Customer,

This is with reference to the NCCPL notice dated December 10, 2012 (notice attached).

NCCPL has provided CGT computation data for the trades executed and settled during period November 01, 2012 to November 30, 2012 to be deducted from respective clients.

Tax Liability (if any) for the aforementioned period have been deducted from your KASB Direct trading account.

Also please note that NCCPL has imposed CGT Calculation Fee. This fee will also be deducted from your KASB Direct accounts along with the CGT. Calculation Fee for the period from July to November 2012 will be deducted from your accounts in due course.

For any further queries, please do not hesitate to call us on 0800-52722 / 111-222-001 or email us at
Title: Re: CGT -- Capital Gains Tax
Post by: umar on December 28, 2012, 04:41:07 PM
Procedures for Computation, Determination and Collection of Capital Gain Tax (“CGT”)
Dear Clearing Members,
This is with reference to the implementation of CGT System by NCCPL in accordance with the Income Tax Ordinance, 2001 (“Ordinance”), Income Tax Rules, 2002 (“Rules”) and NCCPL Regulations. In this respect, following Procedures, applied on CGT System, are reproducing hereunder in order to provide better understanding of the CGT System to the Clearing Members:
1. Following reports/downloads are updated in CGT System on daily basis containing details of computation of CGT upto last settlement day(s). Clearing Members will be required to collect or withhold requisite amount in advance from their respective clients:
i. CGT Gain/Loss Details;
ii. Slab-wise Inventory Balance;
iii. Date-wise Inventory Detail;
iv. Inventory Balance Detail;
v. CGT Consolidated Summary;
vi. CGT Gain/Loss Non-Inventory; and
vii. CGT Gain/Loss Summary Report
2. The net amount of CGT for the month shall be reported to Clearing Members on the working day following the last Settlement Date of the reporting month. Accordingly, CGT shall be collected by the Company on monthly basis for transactions settled in a month, after refund/adjustment of losses of the previous month or months of the same financial year.
3. For collection of tax on capital gains, the Company shall provide an exclusive set of information of “net amount of CGT collection at each UIN level” and “net refund amount of CGT at each UIN level” to respective Settling Banks of the Clearing Members on 7th Settlement Date of each month through NCSS Pay & Collect for the amount of tax determined for previous month or months.
4. The short collection or non-collection of CGT in any month during the financial year shall continue to appear in the CGT liability of coming month or months during the same financial year. In such case, the Company shall serve a Notice to defaulted clients
under intimation to respective Clearing Members to pay the required amount of CGT
within 7-working days. In case of non-payment within the above mentioned stipulated
time, such defaulting UIN(s) may be restricted from taking new positions in all Markets
till the recovery of amount of CGT. However, squaring-up of open Position(s) may be
allowed for such restricted UIN(s).
5. The amount of CGT collected from the investors/persons by the Company shall be
deposited in a separate bank account with the National Bank of Pakistan till the end of
financial year. Accordingly, amount collected till 30-June shall be paid to the Federal
Board of Revenue (“FBR”) along with interest accrued thereon on yearly basis by July
31st of the following financial year.
6. The Company in respect of computation, determination, collection and deposit of capital
gain tax shall, in accordance with the provisions of the Ordinance and Rules made thereunder,
issue/file following certificate/statement:
I. Annual Certificate showing computation/determination of capital gains or loss
and CGT thereon, if any, and payment thereof to each client/ investor through
Clearing Member within thirty days from the end of the financial year.
II. Quarterly Statement of capital gains and tax thereon to FBR within thirty days
from the end of each quarter.
7. Any loss incurred during the financial year will be adjusted against the gains for the same
financial year during which the securities were held for a period of less than a year. Any
loss incurred on securities trading that were held for a period exceeding 12 months will
not be allowed to be adjusted against the gains.
8. Brokerage account of the persons/investors shall not be closed until and unless such
persons/investors obtain a clearance certificate from the Company confirming discharge
of all CGT liability.
9. Since, first-in-first-out (“FIFO”) inventory accounting method is used in CGT System
based on CDS account level, where trades/transactions are settled, Clearing Members
are required to properly manage their portfolio i.e. in case of Investor Account and
multiple CDS sub-accounts under same UIN, Securities should be properly transferred
to the CDS account from where trades are executed and going to be settled.
For any further queries or concerns, please feel free to contact the Customer Support Services of your respective locations. City Telephone Number Fax Number Email
Karachi
021-32460811-19
021-32460827
helpdesk@nccpl.pk
Lahore
042-36280815-7
042-36280818
helpdesk@nccpl.pk
Islamabad
051-2895460-62
051-2895463
helpdesk@nccpl.pk
Regards,
_______sd___________
Badiuddin Akber
Chief Operating Officer
Cc:
1. Director
Title: Re: CGT -- Capital Gains Tax
Post by: SBM on January 28, 2013, 10:26:36 AM
http://www.kse.com.pk/newsimage/040560-1.pdf

cgt for dec will be deducted on january 30
Title: Re: CGT -- Capital Gains Tax
Post by: jay on January 28, 2013, 01:58:17 PM
friends , my broker is deducting CGT on monthly basis but my account @KASB is not deducted CGT for a single month.  pls advise is it really due on monthly basis or 6 months or yearly. also pls adv some one has account with kasb and have paid  CGT.
Title: Re: CGT -- Capital Gains Tax
Post by: tariqmbahrm on January 28, 2013, 02:24:00 PM
i have my account in kasb since 9 december 2012. dont know yet
Title: Re: CGT -- Capital Gains Tax
Post by: Atif1 on January 28, 2013, 02:35:31 PM
I have my account with AKD Trade. From july to sept CGT deducted in mid oct, there after cgt deducted on monthly basis october CGT deducted in late nov.,and nov cgt deducted in late december.
Title: Re: CGT -- Capital Gains Tax
Post by: SBM on January 28, 2013, 02:36:41 PM
friends , my broker is deducting CGT on monthly basis but my account @KASB is not deducted CGT for a single month.  pls advise is it really due on monthly basis or 6 months or yearly. also pls adv some one has account with kasb and have paid  CGT.

call up kasb and ask .. kasb is deduycting cgt from me on a monthly basis
Title: Re: CGT -- Capital Gains Tax
Post by: umer on January 28, 2013, 10:52:35 PM
Cgt returned some cash to me I checked my portfolio today and cash statement don't know does it happen that they given back is there any formula they are applying.
Title: Re: CGT -- Capital Gains Tax
Post by: Salammembers on January 29, 2013, 12:15:40 AM
Apna broker tu 10th taak previous month ka cgt deduct kaar layta haay before any official announcemen :ohmy:
Title: Re: CGT -- Capital Gains Tax
Post by: SBM on January 29, 2013, 09:09:04 AM
Cgt returned some cash to me I checked my portfolio today and cash statement don't know does it happen that they given back is there any formula they are applying.

i think you might have a net loss last month ...
Title: Re: CGT -- Capital Gains Tax
Post by: mra901 on March 08, 2013, 08:09:23 PM
Email received by AKD

This is to bring into your kind notice that ever since, the National Clearing Company of Pakistan Limited (NCCPL) has been entrusted upon with the responsibility to compute, determine, collect and deposit Capital Gain Tax (CGT), it has levied an Annual CGT Fee* (as available in NCCPL Schedule of Fees ) for different categories of investors according to the value of trades and transactions used for computation and determination of CGT as per the following schedule: S #Traded ValueAnnual CGT Fees

1.   less  than Rs. 100,0000                                0
2.   between Rs. 100,000 to Rs. 5 Million         240
3.   between Rs. 5 Million to Rs. 10 Million        360
4.   between Rs. 10 Million to Rs. 50 Million      600
5.   between Rs. 50 Million to Rs. 100 Million   1,800
6.   between Rs. 100 Million to Rs. 500 Million 3,600
7.   between Rs. 500 Million to Rs. 1.0 Billion  12,000
8.   between Rs. 1.0 Billion  to Rs. 5.0 Billion   18,000
9.   If traded values over Rs. 5.0 billions          24,000

 * The above Annual CGT Fee is being deducted by the NCCPL on half-yearly basis. Therefore, as soon as we receive the details of the Annual CGT Fees being levied upon our clients’ accounts, we will deduct the same accordingly. We hope that you will understand the scenario, however, if you have any queries or require further explanation, please do not hesitate to contact us on our Call Centre or email us
Title: Re: CGT -- Capital Gains Tax
Post by: SBM on April 07, 2014, 10:22:58 AM
http://www.brecorder.com/top-stories/0:/1170720:disposal-of-securities-cgt-rate-not-to-be-frozen/?date=2014-04-07
Title: Re: CGT -- Capital Gains Tax
Post by: Hamid Mamraiz on April 07, 2014, 09:43:22 PM
http://www.brecorder.com/top-stories/0:/1170720:disposal-of-securities-cgt-rate-not-to-be-frozen/?date=2014-04-07
17%  :down:
Title: Re: CGT -- Capital Gains Tax
Post by: ASHIQKHAN on April 08, 2014, 11:15:14 AM
17% :confused1:

Better to shift Real Estate sector.
Title: Re: CGT -- Capital Gains Tax
Post by: khi.mym on April 14, 2014, 02:06:24 PM
Tax Amnesty scheme

Please guide me about Tax Amnesty scheme. If any investment is made now or before Jun-2014, then How it is calculated and consider valid for 120 days... Does it mean if any item purchased should not be sold till 120 days or one can sale & purchase another item while Payment is not withdrawn from account. Also advise if there is any further requirement regarding personal CDC Account or members - sub - CDC Account can also work with this.

Thanks.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on May 09, 2014, 01:10:09 AM
http://www.brecorder.com/br-research/999:all/4397:the-cgt-saga-begins-again/?date=2014-05-08

It’s final now!: CGT to be levied on shares sold after June 30

* Shares purchased before July 1 also to be subject to CGT if sold on or after July 1

By Sajid Chaudhry

ISLAMABAD: With the approval of finance bill 2010, the National Assembly here on Friday empowered federal government to levy Capital Gains Tax (CGT) on securities sold on or after July 1, 2010 on selling point basis, even if they were purchased on or before June 30, 2010.

Small investors of the stock market have been exempted from quarterly payment of adjustable advance tax on capital gains from sale of securities. Mutual Fund or collective investment schemes shall deduct CGT on the basis of redemption of securities and according to the holding period.

Holding period of a security has also been defined and it has been mentioned that capital gains on sale of securities shall be reckoned from the date of acquisition (whether before, on or after the 30th day of June 2010) to the date of disposal of such security falling after the 30th day of June 2010.

CGT will applicable on shares of a Public Company, Voucher of Pakistan Telecommunication Corporation, Modarba Certificate and an Instrument of Redeemable Capital. Capital gains arising on or after July 1, 2010, from disposal of securities held for a period of less than a year, shall be chargeable to tax at the rates specified in Division VII of Part I of the first schedule. Provided that this section shall not apply to a banking company and an insurance company.

The definition of security has also bean explained under which security mean shares of a public company voucher of Pakistan Telecommunication Corporation, Modarba Certificate and an instrument of redeemable capital. Gains under this section shall be treated as separate block of income.

Where a person sustains a loss on disposal of securities in tax year, the loss shall be set off only against the gains of the person from any other securities chargeable to tax under this section and no loss shall be carried forward to the subsequent tax year.

According to the procedure given in the finance bill for adjustable advance tax on capital gains from sale of securities shall be chargeable as under, where holding period of a security is less than six month the rate of tax would be two percent of the capital gains derived during the quarter. Where holding period of a security is more than six months but less than 12 months, the rate of tax would be 1.5 percent of the capital gains derived during the quarter. Provided that such advance tax shall be payable to the commissioner within a period of seven days after close of each quarter.

Rate of capital gains to be paid under section 37A, where holding period of a security is less than six months, rate of tax will be 10 percent in fiscal 2011, 10 percent in year 2012, 12.5 percent in 2013, 15 percent in year 2014 and 17.5 percent in year 2015.

Where holding period of a security is more than six months but less than 12 months, rate of capital gains tax will be 7.5 percent in 2011, eight percent in 2012, 8.5 percent in year 2013, nine percent in year 2014, 9.5 percent in year 2015 and 10 percent in year 2016. A new provision has also been added in finance bill under which it has been clarified that where holding period of a security is more than 12 months no capital gains tax will be applicable.

Amendment approved in the finance bill 2010 made it mandatory for the mutual fund or a collective investment scheme to deduct capital gains tax on the basis of redemption of securities.

Cgt was never changed in to 12.5% in 2013 and 15% in 2014 budgets why will it be suddenly raised to 17.5% in 2015
just stupid rumours
Title: Re: CGT -- Capital Gains Tax
Post by: Alpha on May 09, 2014, 12:09:57 PM
http://www.brecorder.com/br-research/999:all/4397:the-cgt-saga-begins-again/?date=2014-05-08

It’s final now!: CGT to be levied on shares sold after June 30

* Shares purchased before July 1 also to be subject to CGT if sold on or after July 1

By Sajid Chaudhry

ISLAMABAD: With the approval of finance bill 2010, the National Assembly here on Friday empowered federal government to levy Capital Gains Tax (CGT) on securities sold on or after July 1, 2010 on selling point basis, even if they were purchased on or before June 30, 2010.

Small investors of the stock market have been exempted from quarterly payment of adjustable advance tax on capital gains from sale of securities. Mutual Fund or collective investment schemes shall deduct CGT on the basis of redemption of securities and according to the holding period.

Holding period of a security has also been defined and it has been mentioned that capital gains on sale of securities shall be reckoned from the date of acquisition (whether before, on or after the 30th day of June 2010) to the date of disposal of such security falling after the 30th day of June 2010.

CGT will applicable on shares of a Public Company, Voucher of Pakistan Telecommunication Corporation, Modarba Certificate and an Instrument of Redeemable Capital. Capital gains arising on or after July 1, 2010, from disposal of securities held for a period of less than a year, shall be chargeable to tax at the rates specified in Division VII of Part I of the first schedule. Provided that this section shall not apply to a banking company and an insurance company.

The definition of security has also bean explained under which security mean shares of a public company voucher of Pakistan Telecommunication Corporation, Modarba Certificate and an instrument of redeemable capital. Gains under this section shall be treated as separate block of income.

Where a person sustains a loss on disposal of securities in tax year, the loss shall be set off only against the gains of the person from any other securities chargeable to tax under this section and no loss shall be carried forward to the subsequent tax year.

According to the procedure given in the finance bill for adjustable advance tax on capital gains from sale of securities shall be chargeable as under, where holding period of a security is less than six month the rate of tax would be two percent of the capital gains derived during the quarter. Where holding period of a security is more than six months but less than 12 months, the rate of tax would be 1.5 percent of the capital gains derived during the quarter. Provided that such advance tax shall be payable to the commissioner within a period of seven days after close of each quarter.

Rate of capital gains to be paid under section 37A, where holding period of a security is less than six months, rate of tax will be 10 percent in fiscal 2011, 10 percent in year 2012, 12.5 percent in 2013, 15 percent in year 2014 and 17.5 percent in year 2015.

Where holding period of a security is more than six months but less than 12 months, rate of capital gains tax will be 7.5 percent in 2011, eight percent in 2012, 8.5 percent in year 2013, nine percent in year 2014, 9.5 percent in year 2015 and 10 percent in year 2016. A new provision has also been added in finance bill under which it has been clarified that where holding period of a security is more than 12 months no capital gains tax will be applicable.

Amendment approved in the finance bill 2010 made it mandatory for the mutual fund or a collective investment scheme to deduct capital gains tax on the basis of redemption of securities.

Cgt was never changed in to 12.5% in 2013 and 15% in 2014 budgets why will it be suddenly raised to 17.5% in 2015
just stupid rumours

Quite right, I was also thinking the same and may be CGT will rise to 12.5% this year rather then 17.5
Title: Re: CGT -- Capital Gains Tax
Post by: MZ on May 09, 2014, 10:02:49 PM
The CGT saga begins again

Tittle-tattles in the stock market industry hint that the government is in the mood to tighten the screws on the long-awaited capital gain tax on the handful of stock investors who have been milking the profits without paying adequate taxes. Quite naturally, stock brokers have taken it with a pinch of salt and perceive it as putting more weight on the investors tax luggage in the upcoming budget by imposing a higher CGT rate on disposal of securities.

As per the income tax ordinance 2013, the CGT rate is intended to be increased from the existing 10 percent to 17.5 percent for the tax year 2015 on securities where the holding period falls below six months. Mind you, the CGT rate for holding period of less than six month has stayed untouched at the rate of 10 percent since 2011.

The odds of a hike in CGT rate have left the entire brokerage community with wrinkled foreheads. Their resounding view is that the move will daunt market participants from indulging in short-term trading to salt away excessive tax payments, thus resulting in a slowdown in trading activities resulting in lower volumes Well, that may be so. But then they should come out of their comfort zone and instead focus on increasing the investor base and on the longevity of the investment horizon for which they have to mature out of the current commission-based model that induces more day trading than long term investment.

The brokerage community also argues that for a government with sturdy privatization plans, the thought of raising the CGT rate seems to be on the wrong track as obscurity in price discovery owing to lower trading activity may hamper the government from getting a fair deal price. Well that might be true and the market may see some correction before it finds a new norm. But this is the price of getting the overall taxation fundamentals right.

The mutual fund industry, which is already lamenting over its small industry size, dispraises the view of increasing the tax burden, and is in harmony with the view of stock brokers. They add that the imposition of higher taxes will not only pipe down the industry prospectus but will also affect the revenue generation capacity of the mutual fund industry, hence slashing investors returns.

More to mutual funds agony, industry sources revealed that the Federal Board of Revenue (FBR) has further proposed that asset management companies should pay 10 percent tax on bonuses declared over the last five years. Since their inception, mutual funds have been enjoying the tax holidays on the condition of distributing 90 percent or more income.

They have been smartly doing this by declaring bonus shares and effectively retaining investments due to which the essence of distribution dies. Nearly all the big banks have parked large chunks of government securities in their fully-owned subsidies and save effectively 25 percent tax. Lately some mutual funds had received notices from the FBR to submit tax on their respective income.

This kind of move can result in large redemptions of Rs395 plus billion industry, out of which Rs111 billion are in equity. Large redemptions could result in distress selling by funds and jolt the market by a few thousand points.

Right now MUFAP is in negotiation with Ministry of Finance to negotiate on this issue. According to sources, the latter might agree to not to levy this tax on asset management industry, given that they distribute the income through cash dividends instead of issuing bonuses. This is the right approach; though, funds may lose these additional units generated through bonuses and investors have to pay tax on dividends according to laws.

Its a win-win situation as there would be no double taxation. Plus investors would get their money in cash after which they can take fresh decision whether to reinvest or consume elsewhere.
Title: Re: CGT -- Capital Gains Tax
Post by: asim.786 on May 10, 2014, 02:09:52 AM
The CGT saga begins again

Tittle-tattles in the stock market industry hint that the government is in the mood to tighten the screws on the long-awaited capital gain tax on the handful of stock investors who have been milking the profits without paying adequate taxes. Quite naturally, stock brokers have taken it with a pinch of salt and perceive it as putting more weight on the investors tax luggage in the upcoming budget by imposing a higher CGT rate on disposal of securities.

As per the income tax ordinance 2013, the CGT rate is intended to be increased from the existing 10 percent to 17.5 percent for the tax year 2015 on securities where the holding period falls below six months. Mind you, the CGT rate for holding period of less than six month has stayed untouched at the rate of 10 percent since 2011.

The odds of a hike in CGT rate have left the entire brokerage community with wrinkled foreheads. Their resounding view is that the move will daunt market participants from indulging in short-term trading to salt away excessive tax payments, thus resulting in a slowdown in trading activities resulting in lower volumes Well, that may be so. But then they should come out of their comfort zone and instead focus on increasing the investor base and on the longevity of the investment horizon for which they have to mature out of the current commission-based model that induces more day trading than long term investment.

The brokerage community also argues that for a government with sturdy privatization plans, the thought of raising the CGT rate seems to be on the wrong track as obscurity in price discovery owing to lower trading activity may hamper the government from getting a fair deal price. Well that might be true and the market may see some correction before it finds a new norm. But this is the price of getting the overall taxation fundamentals right.

The mutual fund industry, which is already lamenting over its small industry size, dispraises the view of increasing the tax burden, and is in harmony with the view of stock brokers. They add that the imposition of higher taxes will not only pipe down the industry prospectus but will also affect the revenue generation capacity of the mutual fund industry, hence slashing investors returns.

More to mutual funds agony, industry sources revealed that the Federal Board of Revenue (FBR) has further proposed that asset management companies should pay 10 percent tax on bonuses declared over the last five years. Since their inception, mutual funds have been enjoying the tax holidays on the condition of distributing 90 percent or more income.

They have been smartly doing this by declaring bonus shares and effectively retaining investments due to which the essence of distribution dies. Nearly all the big banks have parked large chunks of government securities in their fully-owned subsidies and save effectively 25 percent tax. Lately some mutual funds had received notices from the FBR to submit tax on their respective income.

This kind of move can result in large redemptions of Rs395 plus billion industry, out of which Rs111 billion are in equity. Large redemptions could result in distress selling by funds and jolt the market by a few thousand points.

Right now MUFAP is in negotiation with Ministry of Finance to negotiate on this issue. According to sources, the latter might agree to not to levy this tax on asset management industry, given that they distribute the income through cash dividends instead of issuing bonuses. This is the right approach; though, funds may lose these additional units generated through bonuses and investors have to pay tax on dividends according to laws.

Its a win-win situation as there would be no double taxation. Plus investors would get their money in cash after which they can take fresh decision whether to reinvest or consume elsewhere.


Govt never increase cGT if govt do it means up nay paoon pa khud kulhari mare ge
Govt want sell  of govt asset so govt never destabilise market
News spreads to depress market for accomulation
Title: Re: CGT -- Capital Gains Tax
Post by: MZ on May 10, 2014, 09:30:18 AM
Capital gains tax: To prevent hike, KSE decides to visit all authorities

The board of the Karachi Stock Exchange (KSE) has decided to approach the Ministry of Finance, Federal Board of Revenue (FBR) and Privatisation Commission to prevent a major hike in the capital gains tax (CGT) rate, which is scheduled to take effect in the new fiscal year.
In a meeting held on Friday, the KSE board decided that authorities concerned will be asked to withhold the planned increase of the CGT rate from the existing 10% to 17.5% in case the holding period of a security is less than six months.
The CGT rate for a holding period of less than six months was due to increase from 10% in 2012 to 12.5%, 15% and 17.5% in the following years. However, the government kept the rate unchanged at 10% for the last two years, which means it is set to go up by 7.5% in one go in 2014-15.
The CGT rate is marked to increase from 8% to 9.5% in 2014-15 in case the holding period of a stock is more than six months and less than 12 months. There is no CGT on the sale of securities after holding them for a year.
Speaking to The Express Tribune after the board meeting, KSE Director Mohammed Sohail said letting the proposed rate hike take effect will hinder the stock market’s growth in the country.
“Increasing the CGT rate will be detrimental to the government’s privatisation programme, which envisages the sale of government’s stake in different companies to the general public through the stock market,” said Sohail, who also serves as the CEO of Topline Securities, a Karachi-based brokerage.
The National Clearing Company of Pakistan (NCCPL) collected Rs1.2 billion in CGT during 2012-13 from individual investors, brokers and corporate entities. The NCCPL is not authorised to collect CGT from mutual funds, banks, non-banking finance companies, insurance companies, modarabas and foreign institutional investors, as they pay their CGT directly to the FBR.
Sohail added that de-mutualisation of the stock exchange will also receive a setback if the tax rate on capital gains increases. The KSE is in the process of finding an international strategic investor for a 40% stake, which will turn it into a company limited by shares. “Volumes will drop once the CGT rate goes up, turning away potential investors,” he said.
Calling the CGT rate exorbitant, Sohail noted no other regional country taxes capital gains at a rate greater than 15%.
Published in The Express Tribune, May 10th, 2014.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on May 13, 2014, 11:35:34 AM
CGT concerns are back
We foresee short?term weakness at the KSE due to significant upcoming hike in the capital gains
tax (CGT) and the elimination of the "amnesty scheme" for stock market investors. Unlike
2010/11, the hike in CGT will be significant, rising to 17.5% from 10% currently for stocks held
less than 6 months, and to 9.5% from 8% if held for more than 6 months but less than 1 year. In
addition, the “amnesty scheme” introduced in Aril 2012, which promised a 26 month window in
which no questions would be asked on source and nature of funds if invested in the stock
market for a minimum period of four months will also end in Jun?2014. 

Volumes likely to decline 
These rule changes are likely to reduce volumes at the KSE, particularly as the increase in CGT
on less than six month holding is increasing quite significantly. The initial plan was to increase
CGT in a step?wise manner by 2.5% every year from 10% in FY11 to 17.5% by FY15. However,
the presidential ordinance in April 2012 froze the rate at 10% till FY14. It is worth bearing in
mind that the CGT applies to individuals, brokers, and corporate entities, but not to banks,
mutual funds, foreign intuitional investors, NBFC's and insurance companies.

…but the impact should be much less pronounced compared to 2011
However,  the  impact  should  be  much  less  pronounced  as  compared  to  2011,  when  CGT
implementation led to plummeting liquidity; average daily value traded fell to a 13 year low of
US$39mn  (pre?2011).  In  2011,  the  main  reason  for  the  liquidity  shock  was  reluctance  of
investors in providing documentation to the FBR, which was addressed satisfactorily by the
“amnesty scheme.” This time around, investors have had ample time to utilize the “amnesty
scheme” and any adverse impact may only be to the extent of potential fresh liquidity. The
monies that have remained invested in the equity markets will continue to enjoy immunity
from FBR questioning. 

Correction will provide an attractive entry point 
In our opinion, the equity market has just started to price in the CGT rule changes, and further
correction is likely as we approach the federal budget in early June. A correction would provide
an attractive entry point, as markets are likely to adjust to the higher CGT a few of months
down the road. 

kasb
Title: Re: CGT -- Capital Gains Tax
Post by: jay on May 13, 2014, 01:41:45 PM
http://www.express.pk/story/253639/#

Ishaq dar confirmed not to increase %age of CGT in coming budget.
Title: Re: CGT -- Capital Gains Tax
Post by: aliraza on May 13, 2014, 02:31:32 PM
http://www.express.pk/story/253639/#

Ishaq dar confirmed not to increase %age of CGT in coming budget.

bhai abhi confirm nahee hoaa abhi meeting ho gee phir kuch cleaar ho gaaa tab tak mrkt jo jahtke lagnee he haaaaaaaaaaaaaaaaaa :biggthumpup:
Title: Re: CGT -- Capital Gains Tax
Post by: FMY on May 22, 2014, 02:26:16 PM
I am new in stocks trading. I have purchased BoP rights @ 2.7 and then filled rights at Rs 10/-. In this way price is Rs 12.7/-.  I have sell a few bop shares in loss @ 11.2 but my broker is charging CGT @ 10% on amount difference of (11.2-10) considering purchase price of Rs-10/-. while actually i am making loss. Broker is considering BopR as non taxable quantity/shares.

Is it right as per law? please advice.
Title: Re: CGT -- Capital Gains Tax
Post by: SBM on May 22, 2014, 05:24:21 PM
I am new in stocks trading. I have purchased BoP rights @ 2.7 and then filled rights at Rs 10/-. In this way price is Rs 12.7/-.  I have sell a few bop shares in loss @ 11.2 but my broker is charging CGT @ 10% on amount difference of (11.2-10) considering purchase price of Rs-10/-. while actually i am making loss. Broker is considering BopR as non taxable quantity/shares.

Is it right as per law? please advice.

I believe calculation of CGT is done by NCCPL
I think its correct. NCCPL recorded BOP as 10 rupees in your pf, not 12.7
Title: Re: CGT -- Capital Gains Tax
Post by: SBM on May 25, 2014, 06:01:58 PM
http://tribune.com.pk/story/712721/taxing-the-bourse-government-likely-to-fix-capital-gains-tax-at-12-5/
Title: Re: CGT -- Capital Gains Tax
Post by: SBM on May 27, 2014, 04:15:14 PM
http://www.brecorder.com/br-research/44:miscellaneous/4450:the-saga-of-cgt-hike/

looks like brecorder walay is hating missing out on profits  :laugh:
Title: Re: CGT -- Capital Gains Tax
Post by: small bbs on May 27, 2014, 09:15:14 PM
I am new in the mkt. If CGT is increase upto 12% how much will it effect shares and KSE. Any senior I need ur help. As I have invested heavy amount in stocks. I sold some of my land due to family problem. Someone give me advise share mkt is good to earn.

Please can any one beriefly guide about CGT. How many chances are that govt will increase. Thanks
Title: Re: CGT -- Capital Gains Tax
Post by: Dehan on May 27, 2014, 09:46:54 PM
I am new in the mkt. If CGT is increase upto 12% how much will it effect shares and KSE. Any senior I need ur help. As I have invested heavy amount in stocks. I sold some of my land due to family problem. Someone give me advise share mkt is good to earn.

Please can any one beriefly guide about CGT. How many chances are that govt will increase. Thanks
Please go to Chat by clicking the following link and read the chat between me and Apple Bhai.
http://www.pakinvestorsguide.com/yshout/index.php?
Title: Re: CGT -- Capital Gains Tax
Post by: small bbs on May 28, 2014, 12:28:59 AM
I am new in the mkt. If CGT is increase upto 12% how much will it effect shares and KSE. Any senior I need ur help. As I have invested heavy amount in stocks. I sold some of my land due to family problem. Someone give me advise share mkt is good to earn.

Please can any one beriefly guide about CGT. How many chances are that govt will increase. Thanks
Please go to Chat by clicking the following link and read the chat between me and Apple Bhai.
http://www.pakinvestorsguide.com/yshout/index.php?

ok thanks
Any other seniors member. I really need help regarding CGT
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on May 28, 2014, 09:26:46 AM
I am new in the mkt. If CGT is increase upto 12% how much will it effect shares and KSE. Any senior I need ur help. As I have invested heavy amount in stocks. I sold some of my land due to family problem. Someone give me advise share mkt is good to earn.

Please can any one beriefly guide about CGT. How many chances are that govt will increase. Thanks
Please go to Chat by clicking the following link and read the chat between me and Apple Bhai.
http://www.pakinvestorsguide.com/yshout/index.php?

ok thanks
Any other seniors member. I really need help regarding CGT

I still don't think it will increase but as per media reports cgt will be increased to 12.5%
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 03, 2014, 07:10:33 PM
The rate of capital gains tax was to increase from 10% to 17.5% with effect from 1st July 2014. However, to ensure continued stability in the stock market, it is proposed that with effect from 1st July 2014 CGT rates shall be 12.5% for securities held up to 12 months and 10% for securities held for a period which is between 12 to 24 months, whereas the securities held for more than 24 months shall be exempt from CGT.
Title: Re: CGT -- Capital Gains Tax
Post by: arifjamal on June 03, 2014, 09:09:16 PM
The rate of capital gains tax was to increase from 10% to 17.5% with effect from 1st July 2014. However, to ensure continued stability in the stock market, it is proposed that with effect from 1st July 2014 CGT rates shall be 12.5% for securities held up to 12 months and 10% for securities held for a period which is between 12 to 24 months, whereas the securities held for more than 24 months shall be exempt from CGT.
so, now what will reaction of market tomorrow
Title: Re: CGT -- Capital Gains Tax
Post by: small bbs on June 03, 2014, 09:12:48 PM
The rate of capital gains tax was to increase from 10% to 17.5% with effect from 1st July 2014. However, to ensure continued stability in the stock market, it is proposed that with effect from 1st July 2014 CGT rates shall be 12.5% for securities held up to 12 months and 10% for securities held for a period which is between 12 to 24 months, whereas the securities held for more than 24 months shall be exempt from CGT.
so, now what will reaction of market tomorrow

1st bad thing :holding period increased bad for short medium trader
2nd bad thing: Increase the rate too 12.5%

Both are -ve and i guess bad impact on mkt and also ALTAF scenario.

Should avoid fresh buying and try to sell

Tomorrow Mandee hi lag rahi hay
Title: Re: CGT -- Capital Gains Tax
Post by: sanwar on June 03, 2014, 09:41:10 PM
@Seniors, isn't this CGT rate already built-in...??
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 03, 2014, 10:18:30 PM
236M. Bonus shares.- (1) Every person issuing bonus shares to a shareholder of the company, shall collect tax at the rate of five per cent on the value of the bonus shares determined on the basis of day-end price on the first day of closure of books.
(2) The company issuing bonus shares shall make adequate arrangements for collection of such tax and in case of default, said tax shall be collected from the company, without prejudice to any other liability which it may incur under this Ordinance
(3) Tax required to be collected under this section shall be a final tax on the income of the shareholder of the company arising from issuance of bonus shares.”;
Title: Re: CGT -- Capital Gains Tax
Post by: Dehan on June 03, 2014, 10:26:02 PM
The rate of capital gains tax was to increase from 10% to 17.5% with effect from 1st July 2014. However, to ensure continued stability in the stock market, it is proposed that with effect from 1st July 2014 CGT rates shall be 12.5% for securities held up to 12 months and 10% for securities held for a period which is between 12 to 24 months, whereas the securities held for more than 24 months shall be exempt from CGT.
so, now what will reaction of market tomorrow

1st bad thing :holding period increased bad for short medium trader
2nd bad thing: Increase the rate too 12.5%

Both are -ve and i guess bad impact on mkt and also ALTAF scenario.

Should avoid fresh buying and try to sell

Tomorrow Mandee hi lag rahi hay
This news was already in the mkt and the day this rumour was confirmed. The mkt took it positive. So no negative impact. As this has already priced in.
Title: Re: CGT -- Capital Gains Tax
Post by: Hamid Mamraiz on June 03, 2014, 10:30:41 PM
236M. Bonus shares.- (1) Every person issuing bonus shares to a shareholder of the company, shall collect tax at the rate of five per cent on the value of the bonus shares determined on the basis of day-end price on the first day of closure of books.
(2) The company issuing bonus shares shall make adequate arrangements for collection of such tax and in case of default, said tax shall be collected from the company, without prejudice to any other liability which it may incur under this Ordinance
(3) Tax required to be collected under this section shall be a final tax on the income of the shareholder of the company arising from issuance of bonus shares.”;
NO more Bonus issues from companies after this news ...
Title: Re: CGT -- Capital Gains Tax
Post by: sabir.hussain on June 03, 2014, 10:35:06 PM
buy nml,efoods,luck, for 2 morrow :thumbsup_anim:
Title: Re: CGT -- Capital Gains Tax
Post by: Dehan on June 03, 2014, 10:39:48 PM
236M. Bonus shares.- (1) Every person issuing bonus shares to a shareholder of the company, shall collect tax at the rate of five per cent on the value of the bonus shares determined on the basis of day-end price on the first day of closure of books.
(2) The company issuing bonus shares shall make adequate arrangements for collection of such tax and in case of default, said tax shall be collected from the company, without prejudice to any other liability which it may incur under this Ordinance
(3) Tax required to be collected under this section shall be a final tax on the income of the shareholder of the company arising from issuance of bonus shares.”;
NO more Bonus issues from companies after this news ...
Why hamid bhai? Bonus to meilin gay par with reduced to 95%. Just 5% yaar. Cash pa 10% daitay hain. Bonus pa to 50% tax laga.
Title: Re: CGT -- Capital Gains Tax
Post by: saadqureshi on June 03, 2014, 11:05:04 PM
236M. Bonus shares.- (1) Every person issuing bonus shares to a shareholder of the company, shall collect tax at the rate of five per cent on the value of the bonus shares determined on the basis of day-end price on the first day of closure of books.
(2) The company issuing bonus shares shall make adequate arrangements for collection of such tax and in case of default, said tax shall be collected from the company, without prejudice to any other liability which it may incur under this Ordinance
(3) Tax required to be collected under this section shall be a final tax on the income of the shareholder of the company arising from issuance of bonus shares.”;
NO more Bonus issues from companies after this news ...
Why hamid bhai? Bonus to meilin gay par with reduced to 95%. Just 5% yaar. Cash pa 10% daitay hain. Bonus pa to 50% tax laga.

Just read the 2nd point, why would any company want to be paying tax instead of awam  :D
Title: Re: CGT -- Capital Gains Tax
Post by: Muhammad Fahad on June 03, 2014, 11:07:19 PM
5. 'Currently, foreign institutional investors in stock exchanges are neither voluntarily paying due taxes on capital gains by filing returns nor are they subject to deduction of tax like many other investors. To prevent loss of revenue, it is proposed to bring FIIs under the withholding tax regime.'

Salient features Income tax from fbr website. Negative for foreign investors.
Title: Re: CGT -- Capital Gains Tax
Post by: Dehan on June 03, 2014, 11:25:28 PM
236M. Bonus shares.- (1) Every person issuing bonus shares to a shareholder of the company, shall collect tax at the rate of five per cent on the value of the bonus shares determined on the basis of day-end price on the first day of closure of books.
(2) The company issuing bonus shares shall make adequate arrangements for collection of such tax and in case of default, said tax shall be collected from the company, without prejudice to any other liability which it may incur under this Ordinance
(3) Tax required to be collected under this section shall be a final tax on the income of the shareholder of the company arising from issuance of bonus shares.”;
NO more Bonus issues from companies after this news ...
Why hamid bhai? Bonus to meilin gay par with reduced to 95%. Just 5% yaar. Cash pa 10% daitay hain. Bonus pa to 50% tax laga.

Just read the 2nd point, why would any company want to be paying tax instead of awam  :D
The bonus issuing company will collect the tax from the shareholder, not to pay the tax by itself. In case of collection of default then company will pay the tax. The company will simply say k pehlay tax jama karvao phir bonus milein gay. Dosra tariki k 5% bonus deduct kar k credit kia jia ga. However collection methodology will be explained by the FBR.
Title: Re: CGT -- Capital Gains Tax
Post by: SRN on June 03, 2014, 11:30:41 PM
I think from company's point of view, it will be easier for a compny to issue -5% bonus shares, and deposit the proceed after selling the bonus shares in the market. Howerver, company will decide what methadology to adopt
Title: Re: CGT -- Capital Gains Tax
Post by: Capricon83 on June 04, 2014, 12:15:56 AM
According to my understanding:

Previously Bonus was liable to CGT as under:

"At the time of credit of bonus shares in the shareholders account, in accordance with CBR’s Letter C.No. 1(13)IT-1/72, dated the 18th May, 1972, the cost of such shares would be computed by spreading the cost of old shares over the old shares plus the bonus shares taken together. This cost of a share would be the same for the old shares and the new shares. Subsequently, when such bonus shares are disposed of, such cost will be taken for computation of capital gain and tax thereon."

and NOW under the proposed scheme:

"Tax required to be collected under this section shall be a final tax on the income of the shareholder of the company arising from issuance of bonus shares" so if 5% tax on bonus is under Final Tax Regime then after bonus price i.e. 95% of share price should be treated as cost of new shares hence CGT should be calculated calculated on the basis of this price.

If this is true then for a SIMPLIFIED EXAMPLE if a shareholder have:
No. of share........... 500
Cost........... 100
Bonus........... 20%
Ex-MV........... 120
Sold at........... 140

CGT as previously:
Sale........... 600 x 140 = 84,000
Cost........... 600 x (500x100/600) = 50,000
CGT @ 10%........... 84,000 - 50,000 = 34,000 x 10% = 3,400

CGT under proposed Scheme:
CGT on Bonus........... 100 x 120 = 12,000 x 5% = 600

Sale........... 600 x 140 = 84,000
Cost........... 500 x 100 + 100 x 120 = 62,000
CGT @ 12.5%........... 84,000 - 62,000 = 22,000 x 12.5% = 2,750

Total CGT under new scheme 3,350 as compared to 3,400 under previous scheme

ITS ONLY TIMING DIFFERENCE COZ DAR SB NEED URGENT MONEY WO BE DEDUCTED AT SOURCE

Only my very own understanding. Further clarifications from FBR regarding cost of Bonus Share can prove me absolutely wrong.
Title: Re: CGT -- Capital Gains Tax
Post by: Dehan on June 04, 2014, 07:17:18 AM
I think from company's point of view, it will be easier for a compny to issue -5% bonus shares, and deposit the proceed after selling the bonus shares in the market. Howerver, company will decide what methadology to adopt
It will not be decided by the company. The procedure will be laid down by FBR which will be complied by the company. Lets see FBR kia tay karta hay.
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on June 20, 2014, 10:04:41 AM
Every person issuing bonus shares to a shareholder of the company shall collect tax at the rate of five percent on the value of the bonus shares determined on the basis of day-end price on the first day of closure of books; and the company issuing bonus shares shall make adequate arrangements for collection of such tax and tax so collected under this section shall be a final tax on the income of the shareholder of the company arising from the issuance of bonus shares.

http://www.thenews.com.pk/Todays-News-3-256986-Bonus-shares-ideal-option-for-tax-avoidance

Title: Re: CGT -- Capital Gains Tax
Post by: SBM on June 22, 2014, 05:19:21 AM
Brief on amendments proposed in Finance Bill 2014
June 21, 2014

A. F. FERGUSON & CO Comments

INCOME TAX: BONUS SHARES: Through the Finance Bill, 2014, bonus shares were proposed to be taxed in the hands of the shareholder. In our Memorandum on Finance Bill, it was stated that bonus shares do not represent income in the hands of either the company or the shareholder. Now certain amendments have been made in the proposed bill inter alia to overcome that aspect and to provide mechanism for collection of tax on bonus shares, taxable in the hands of the shareholders. Two sections viz. 236M and 236N now relate to tax on bonus shares in the hands of shareholders, to be collected by listed and unlisted companies respectively.

Brief outline of the new mechanism is as under:

a) Issuance of Bonus shares by a company quoted on the Stock Exchange

-- A company which is quoted on the Stock Exchange and issues bonus shares to its shareholders will withhold bonus shares, at the rate of 5% of the bonus shares issued on the first day of closure of books. The bonus shares so withheld will be deposited with the Central Depository Company of Pakistan Limited (CDC).

-- Bonus shares so deposited by the Company will be disposed of by the CDC and the proceeds shall be paid, on behalf of the shareholders, by way of credit to the Federal Government.

b) Issuance of Bonus shares by a company not quoted on the Stock Exchange

-- A company which is not quoted on the Stock Exchange and issues bonus shares to its shareholders will deposit tax, within 15 days of the closure of the books, at the rate of 5% of the value of the bonus shares on the basis of day-end price on the first day of closure of books, whether or not tax has been collected from the shareholders by the Company. A clarification is desired from FBR to determine day-end price for unquoted shares.

-- Before the issuance of bonus shares, the company liable to deposit tax shall be entitled to collect and recover the amount of tax deposited from the shareholder on whose behalf the tax is deposited.

-- In case a shareholder neither makes payment of tax to the company nor collects his bonus shares, within 3 months of the date of issuance of bonus shares, the company may proceed to dispose of bonus shares to the extent it has paid tax on his behalf.

We reiterate that validity of taxing bonus shares, value to be taxed and manner of collection is expected to be tested in courts and the case laws in the comparative jurisdictions support the view that bonus share do not per se represent income under the Ordinance.

A hybrid tax system has been introduced where company, shareholder and the custodian of listed shares, being CDC has been involved in the collection of tax process. Under a specific sub-section, it has been stated that value of bonus shares shall be deemed to be the income of the shareholder and the tax so collected shall be final liability for the shareholder.

In addition to the same, the matter that needs to be resolved specially in the case of listed companies is the right of surrender of certain part of shares to CDC and disposal of shares for the payment of tax for such purposes and the manner of collection where shares are not dealt through CDC.

In case of unlisted companies, the corporate law consequences for disposal of shares to collect tax on bonus shares, if shareholders do not pay tax on bonus shares, need to be thrashed ou

http://www.brecorder.com/company-news/235:pakistan/1194861:brief-on-amendments-proposed-in-finance-bill-2014/?date=2014-06-21
Title: Re: CGT -- Capital Gains Tax
Post by: SBM on July 05, 2014, 11:30:43 PM
(http://i1012.photobucket.com/albums/af242/ouulman/Mobile%20Uploads/IMG-20140705-WA0034_zps5yysgyug.jpg)

I think now by default tax will be deducted at 15% from all dividend payments. Only people who submit their tax details will get reduced rates
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on July 06, 2014, 03:05:08 PM
http://www.thenews.com.pk/Todays-News-3-260067-Listed-firms-ordered-to-withhold-5pc-tax-on-bonus-shares
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on July 19, 2014, 01:44:47 PM
http://www.brecorder.com/top-stories/0:/1204139:bonus-shares-companies-must-deposit-tax-in-15-days-of-closure-of-books-fbr/?date=2014-07-19
Title: Re: CGT -- Capital Gains Tax
Post by: mansoorsajid on July 24, 2014, 06:00:45 PM
If I transfer shares from my CDC account to my CDC Sub account with broker and sell my shares ,what will be the rate of CGT
Title: Re: CGT -- Capital Gains Tax
Post by: Salammembers on July 24, 2014, 06:19:08 PM
If I transfer shares from my CDC account to my CDC Sub account with broker and sell my shares ,what will be the rate of CGT
i think if u sell your shares from main CDC account, CGT will 0%
Title: Re: CGT -- Capital Gains Tax
Post by: SBM on August 01, 2014, 10:20:36 PM
Every person issuing bonus shares to a shareholder of the company shall collect tax at the rate of five percent on the value of the bonus shares determined on the basis of day-end price on the first day of closure of books; and the company issuing bonus shares shall make adequate arrangements for collection of such tax and tax so collected under this section shall be a final tax on the income of the shareholder of the company arising from the issuance of bonus shares.

http://www.thenews.com.pk/Todays-News-3-256986-Bonus-shares-ideal-option-for-tax-avoidance

(http://www.dilbert.com/dyn/str_strip/000000000/00000000/0000000/200000/20000/6000/000/226093/226093.strip.gif)
Title: Re: CGT -- Capital Gains Tax
Post by: drrizwan on August 31, 2014, 12:11:24 AM
The dividend rate on ipps like hubc, kapco was 7.5%, now for non filers what will it be, 12.5% or 15%?

(http://i1012.photobucket.com/albums/af242/ouulman/Mobile%20Uploads/IMG-20140705-WA0034_zps5yysgyug.jpg)

I think now by default tax will be deducted at 15% from all dividend payments. Only people who submit their tax details will get reduced rates

Rather then individual companies collecting this info it should be CDC who should do it so the shareholders are facilitated. I tried submitting my NTN to CDC but their investor information updating form doesn't have a section on NTN.  :bangin: :bangin: :bangin:
Title: Re: CGT -- Capital Gains Tax
Post by: SBM on September 01, 2014, 04:10:36 AM
The dividend rate on ipps like hubc, kapco was 7.5%, now for non filers what will it be, 12.5% or 15%?

(http://i1012.photobucket.com/albums/af242/ouulman/Mobile%20Uploads/IMG-20140705-WA0034_zps5yysgyug.jpg)

I think now by default tax will be deducted at 15% from all dividend payments. Only people who submit their tax details will get reduced rates

Rather then individual companies collecting this info it should be CDC who should do it so the shareholders are facilitated. I tried submitting my NTN to CDC but their investor information updating form doesn't have a section on NTN.  :bangin: :bangin: :bangin:

dunno waiting to receive dividend to find out ..
Title: Re: CGT -- Capital Gains Tax
Post by: M_Irfan on September 01, 2014, 06:19:25 PM
CBR has provided updated ATL (Active Tax Payer List) at its website and it seems companies are required to check the status of their shareholders in the list and make deductions accordingly.  Engro Corp advertised that they are using this list for deducting tax on dividend.
Title: Re: CGT -- Capital Gains Tax
Post by: SBM on September 26, 2014, 06:08:08 PM
http://www.brecorder.com/top-stories/0:/1227805:bonus-shares-issuers-restrained-from-withholding-five-percent-income-tax/?date=2014-09-26
Title: Re: CGT -- Capital Gains Tax
Post by: Irfankhan on March 29, 2015, 01:14:06 AM
Market went down 4500 points my views are a person who sells the share now and if he is getting profits then he will not easily enter into the market until they get big discount. the reason is following:-
the share bought at 10 rupee if it went upto 20 rupees in 15 months then if somebody sells the share at even at top means 20 rupees he will never enter till if the value is 16 today because he gave CGT of 1.25 rupees on those 10 rupees earned means if he enters today at 16 rupees then he is getting only 2.75 per share.
Market needed big discounts to get interest to buy again. every buyer doesnot buy every share. each buyer has preferences.
the market will come back but after reasonable bottom.
Seniors please advise if anybody blanksell in futures and he gets profits. whats the situation of CGT then?
Thanks
Title: Re: CGT -- Capital Gains Tax
Post by: SBM on March 29, 2015, 02:17:29 AM
Market went down 4500 points my views are a person who sells the share now and if he is getting profits then he will not easily enter into the market until they get big discount. the reason is following:-
the share bought at 10 rupee if it went upto 20 rupees in 15 months then if somebody sells the share at even at top means 20 rupees he will never enter till if the value is 16 today because he gave CGT of 1.25 rupees on those 10 rupees earned means if he enters today at 16 rupees then he is getting only 2.75 per share.
Market needed big discounts to get interest to buy again. every buyer doesnot buy every share. each buyer has preferences.
the market will come back but after reasonable bottom.
Seniors please advise if anybody blanksell in futures and he gets profits. whats the situation of CGT then?
Thanks

dunno about short selling profits in futures. but buying par tu same cgt rates hain
I am pretty sure shorting will have same cgt treatment
Title: Re: CGT -- Capital Gains Tax
Post by: kpall99 on March 29, 2015, 12:25:07 PM
@Irfan Khan - Your logic is true for the small investors but not for the big institutes.

Look at the data for last week - Why banks are buying cements at this price? They hold for years so no CGT impact on them. In return they they get Dividends.

 

Market went down 4500 points my views are a person who sells the share now and if he is getting profits then he will not easily enter into the market until they get big discount. the reason is following:-
the share bought at 10 rupee if it went upto 20 rupees in 15 months then if somebody sells the share at even at top means 20 rupees he will never enter till if the value is 16 today because he gave CGT of 1.25 rupees on those 10 rupees earned means if he enters today at 16 rupees then he is getting only 2.75 per share.
Market needed big discounts to get interest to buy again. every buyer doesnot buy every share. each buyer has preferences.
the market will come back but after reasonable bottom.
Seniors please advise if anybody blanksell in futures and he gets profits. whats the situation of CGT then?
Thanks
Title: Re: CGT -- Capital Gains Tax
Post by: momo on May 28, 2015, 09:21:01 AM
http://tribune.com.pk/story/893401/budget-2015-16-govt-proposes-higher-cgt-on-traded-securities/

Here we go again. Taxing the already taxed. they will never learn.
Title: Re: CGT -- Capital Gains Tax
Post by: kpall99 on May 28, 2015, 10:13:28 AM
http://tribune.com.pk/story/893401/budget-2015-16-govt-proposes-higher-cgt-on-traded-securities/

Here we go again. Taxing the already taxed. they will never learn.

Ghareeb awam ka maal is news pay nikal jana chahiyee.

By the way there is no rule of law. Gains are taxed up to two years and now proposal to up to 5 years but losses are not carried forward. Hell with Dar ..
Title: Re: CGT -- Capital Gains Tax
Post by: arifjamal on May 28, 2015, 10:36:20 AM
http://tribune.com.pk/story/893401/budget-2015-16-govt-proposes-higher-cgt-on-traded-securities/

Here we go again. Taxing the already taxed. they will never learn.

Ghareeb awam ka maal is news pay nikal jana chahiyee.

By the way there is no rule of law. Gains are taxed up to two years and now proposal to up to 5 years but losses are not carried forward. Hell with Dar ..
what the hell with this stupid government , we already are paying too much taxes, hor do GANJAY noo vote, GANJA na khappay
Title: Re: CGT -- Capital Gains Tax
Post by: asim.786 on May 28, 2015, 11:09:39 AM
http://tribune.com.pk/story/893401/budget-2015-16-govt-proposes-higher-cgt-on-traded-securities/

Here we go again. Taxing the already taxed. they will never learn.

Ghareeb awam ka maal is news pay nikal jana chahiyee.

By the way there is no rule of law. Gains are taxed up to two years and now proposal to up to 5 years but losses are not carried forward. Hell with Dar ..
what the hell with this stupid government , we already are paying too much taxes, hor do GANJAY noo vote, GANJA na khappay

dont b panic stay medium to long
rumur can damage ur investment if u will work in short term
panic is created to get out weak holder stocks
i dont think they will increase cgt
if they are talking about privatise govt entiites
Title: Re: CGT -- Capital Gains Tax
Post by: DK on May 28, 2015, 11:30:05 AM
why dont they just dip us in honey and stick us to an ant farm....... phir kehtay hain investment nahi ati.
Title: Re: CGT -- Capital Gains Tax
Post by: abdullah01 on May 28, 2015, 12:37:28 PM
why dont they just dip us in honey and stick us to an ant farm....... phir kehtay hain investment nahi ati.

Simple answer:
We can always invest in UAE stock market or Russian or South American stock markets where taxes are low.
Government already know if they increase CGT too much, we can always switch to overseas stock markets.As of tax net, our taxes are still low as compared to major stock markets so if they increase too much they know well we can switch to international stock market.All our major companies are already expanding to overseas because of too much expenses.
Title: Re: CGT -- Capital Gains Tax
Post by: srali14 on May 28, 2015, 01:08:08 PM
Govt. already getting tax from local investors on profit but not share in loss. I bought beemapak shares 15k after some months  beemapak shares trading  banned and still no result as  many years passed. Why govt. is not managing beemapak shareholders loss from tax money?
Title: Re: CGT -- Capital Gains Tax
Post by: abdullah01 on May 28, 2015, 01:44:32 PM
Govt. already getting tax from local investors on profit but not share in loss. I bought beemapak shares 15k after some months  beemapak shares trading  banned and still no result as  many years passed. Why govt. is not managing beemapak shareholders loss from tax money?

I was once talking with guy who works with taxation and CGT taxes. He in his observation said "Only investors in Pakistan who actually gain money every year are ones who are old like 60+, i hardly find young people gaining money". This taxation officer asked these old age investors "why they always gain money? and young always lose money". The answer of all these investors were "we only buy blue chips mostly,high-dividend yield strong stocks,always buy in small chunks, never panic and lost on to shares if they are in loss".
  At end of day, lesson is never buy small companies, invest in blue chips mostly.Don't buy and sell big amonts in start.It takes atleast 10 years of slow trading in small amount to become successful traders.Always control your emotions.
Title: Re: CGT -- Capital Gains Tax
Post by: deemah on May 28, 2015, 02:23:53 PM
Pakistan elite and bureaucracy continue to make policies to tax ordinary people so that they can protect powerful segments of society. This is preventing investments and savings in Pakistan.
Take example of UK where every citizen is allowed to save or invest £15240 each year and exempt from any income or capital gain on this amount for life. On the top of this, one is exempt from capital gain tax up to £11000 per year. But after that capital gain is taxed at full income tax rate at 40-45%.
If you apply this formula in Pakistan, 95% of people will not pay any withholding tax on bank deposit and no capital gain tax for investment in shares. But 5% of very rich people (technically tax filers) will not get away with paying 10% tax on bank profits, dividend income and capital gain tax. They will have to pay 30-35% tax on all income and CGT above the exempt amount. Same formula can be applied on agriculture tax. This will massively increase revenues and encourage common people to save and invest. We may not need any foreign loans or investment.
But who will bell the cat?
deemah
 
Title: Re: CGT -- Capital Gains Tax
Post by: Stock_hunt on May 28, 2015, 07:18:56 PM
write down my words

THEre WONT BE INCREASE IN CAPITAL GAIN TAX
Title: Re: CGT -- Capital Gains Tax
Post by: HasanZaheer on May 28, 2015, 11:36:44 PM
Hey guys.

Just a small query...

If we pay CGT in the current fiscal year then do we get refunded only at 12.5% of the loss or on 100% of the loss.

I mean, lets say we paid 10,000 rupees as CGT in the fiscal year and have not made any loss trade.
But if I make a loss trade now with a loss of 10,000 rs, will i get refunded the complete 10,000 or only 1,250 rupees at 12.5 % of loss.

Please answer only if you are sure.
Title: Re: CGT -- Capital Gains Tax
Post by: Alpha on May 29, 2015, 12:02:56 AM
Hey guys.

Just a small query...

If we pay CGT in the current fiscal year then do we get refunded only at 12.5% of the loss or on 100% of the loss.

I mean, lets say we paid 10,000 rupees as CGT in the fiscal year and have not made any loss trade.
But if I make a loss trade now with a loss of 10,000 rs, will i get refunded the complete 10,000 or only 1,250 rupees at 12.5 % of loss.

Please answer only if you are sure.

1250rs or 12.5% same as in profit
Title: Re: CGT -- Capital Gains Tax
Post by: mahmad786 on May 29, 2015, 07:19:33 AM
Nothing is given if you make a loss. It is capital gain tax I.e tax on profit
Title: Re: CGT -- Capital Gains Tax
Post by: waseemalisyed on May 29, 2015, 08:23:34 AM
Dear seniors CGT is refundable tax
Title: Re: CGT -- Capital Gains Tax
Post by: Ummair on May 29, 2015, 09:46:12 AM
Dear seniors CGT is refundable tax

Dear How to refund CGT tax?
Title: Re: CGT -- Capital Gains Tax
Post by: Dehan on May 29, 2015, 09:49:29 AM
Hey guys.

Just a small query...

If we pay CGT in the current fiscal year then do we get refunded only at 12.5% of the loss or on 100% of the loss.

I mean, lets say we paid 10,000 rupees as CGT in the fiscal year and have not made any loss trade.
But if I make a loss trade now with a loss of 10,000 rs, will i get refunded the complete 10,000 or only 1,250 rupees at 12.5 % of loss.

Please answer only if you are sure.

1250rs or 12.5% same as in profit
CGT is adjustable during the financial year i.e July to June. It is not carried forwarded. Capital losses r adjusted to the extent of capital gains for CGT purpose.
If u incur net loss during the year the FBR will not credit u the CGT for loss.

So if CGT is imposed and u r in loss in any share sell it at the end of the day and buy it on next day. Ur loss will be book it and get it adjusted against capital gain. 
Title: Re: CGT -- Capital Gains Tax
Post by: Farzooq on May 29, 2015, 11:16:45 AM
Dear seniors CGT is refundable tax

yes it is refunded in your account. you make profit for one month u pay cgt. you booked loss in second month cgt is refunded.
Title: Re: CGT -- Capital Gains Tax
Post by: DK on May 29, 2015, 11:34:12 AM
The CAPTAIN spoke  :ohmy:
Title: Re: CGT -- Capital Gains Tax
Post by: afzalch on May 29, 2015, 04:42:33 PM
Gov't is collecting CGT from the investors in stocks , if the investors are paying In property if not why ?Are they sacred cows ?
Title: Re: CGT -- Capital Gains Tax
Post by: arifjamal on June 03, 2015, 12:53:04 PM
 SECP suggests FBR to withdraw 5% tax on bonus shares, apply 12.5% CGT irrespective of the holding period
Title: Re: CGT -- Capital Gains Tax
Post by: valor123 on June 03, 2015, 01:12:11 PM
very detrimental suggestion, should be no cgt after 2 years of holding....
Title: Re: CGT -- Capital Gains Tax
Post by: arifjamal on June 03, 2015, 02:49:12 PM
very detrimental suggestion, should be no cgt after 2 years of holding....
valor bro, hamaray chahnay say kia ho ga, wohi hoga jo munshi chaahay ga, too much taxes on capital market, ab pehlay jaisa maza nahi raaha capital markets main
Title: Re: CGT -- Capital Gains Tax
Post by: arifjamal on June 05, 2015, 10:49:41 AM
Capital Gain Tax
Current Below12M    Above12 But Below 24M         Above24M
FY2015 12.5%       10.0%                -
Proposal-1
FY2016 15.0%       12.5%               7.5%
Proposal-2
FY2016 7.5%              7.5%               7.5%

Source: AHL Research, New s Reports
Title: Re: CGT -- Capital Gains Tax
Post by: DK on June 05, 2015, 11:06:41 AM
Capital Gain Tax
Current Below12M    Above12 But Below 24M         Above24M
FY2015 12.5%       10.0%                -
Proposal-1
FY2016 15.0%       12.5%               7.5%
Proposal-2
FY2016 7.5%              7.5%               7.5%

Source: AHL Research, New s Reports
current active is much better. if they have to change proposal 2 is acceptable.
Title: Re: CGT -- Capital Gains Tax
Post by: optimistic on June 05, 2015, 03:34:20 PM
can someone tell me when SHAN FOOD IPO is coming?  :thanks:
Title: Re: CGT -- Capital Gains Tax
Post by: Loto or Photo on June 05, 2015, 05:50:38 PM
rumours capital gain tax will be increase 15%
Title: Re: CGT -- Capital Gains Tax
Post by: Ali135 on June 05, 2015, 06:07:45 PM
to kal ho jaye aik dip.... :bangin:
Title: Re: CGT -- Capital Gains Tax
Post by: HasanZaheer on June 05, 2015, 06:13:49 PM
to kal ho jaye aik dip.... :bangin:

Textile tou kal top hai.
Title: Re: CGT -- Capital Gains Tax
Post by: Ali135 on June 05, 2015, 06:17:33 PM
to kal ho jaye aik dip.... :bangin:

Textile tou kal top hai.

how?
Title: Re: CGT -- Capital Gains Tax
Post by: Loto or Photo on June 05, 2015, 06:23:10 PM
rumours capital gain tax will be increase 15%

confirmed yes it is increased to 15%
Title: Re: CGT -- Capital Gains Tax
Post by: zakhan76 on June 05, 2015, 06:24:01 PM
Textile sector will rock on monday...
CGT on stocks increased as it was being highlighted...
Title: Re: CGT -- Capital Gains Tax
Post by: zakhan76 on June 05, 2015, 06:26:19 PM
Tax on dividends also increased
Title: Re: CGT -- Capital Gains Tax
Post by: Loto or Photo on June 05, 2015, 06:26:59 PM
rumours capital gain tax will be increase 15%

confirmed yes it is increased to 15%

DIVID per bi tax berha dia hay 2.5% increased
Title: Re: CGT -- Capital Gains Tax
Post by: DEVDAS on June 05, 2015, 06:28:21 PM
rumours capital gain tax will be increase 15%

confirmed yes it is increased to 15%

DIVID per bi tax berha dia hay 2.5% increased
All rumors r truth now.
Title: Re: CGT -- Capital Gains Tax
Post by: BullsBears on June 05, 2015, 06:30:11 PM
10 to 12.5%
12.5 to 15%
Title: Re: CGT -- Capital Gains Tax
Post by: Loto or Photo on June 05, 2015, 06:30:32 PM
rumours capital gain tax will be increase 15%

confirmed yes it is increased to 15%

DIVID per bi tax berha dia hay 2.5% increased
All rumors r truth now.

Companies are forced to give DIVID to share holder if not then tax will be imposed
Title: Re: CGT -- Capital Gains Tax
Post by: JF on June 05, 2015, 06:33:00 PM
10% income tax for companies if they not pay dividend within 6 months

also tax on dividend increase
Title: Re: CGT -- Capital Gains Tax
Post by: Loto or Photo on June 05, 2015, 06:33:31 PM
Investment range increase from 1m to 1.5m in stock exchange to give tax credit
Title: Re: CGT -- Capital Gains Tax
Post by: JF on June 05, 2015, 06:34:45 PM
Tax on MUTUL FUNDS unchanged
Title: Re: CGT -- Capital Gains Tax
Post by: zakhan76 on June 05, 2015, 06:35:01 PM
Capital gains tax imposed on sale of shares

For shares sold after two years, the rate of tax would be 7.5%. Previously, shares sold after a holding period of two years were exempted from tax.

For shares sold between 1-2 years, the rate would be 12.5% — increased from 10%. While, for shares sold within a year, the rate would be 15%.
Title: Re: CGT -- Capital Gains Tax
Post by: Analyst Group on June 05, 2015, 06:37:40 PM
He has not announced anything about tax on bonus shares. It means tax on bonus shares might not be removed
Title: Re: CGT -- Capital Gains Tax
Post by: zakhan76 on June 05, 2015, 06:39:44 PM
Mark up on long term loans reduced to 6%
Title: Re: CGT -- Capital Gains Tax
Post by: Loto or Photo on June 05, 2015, 06:41:43 PM
Market on Monday big Red legti hay
Title: Re: CGT -- Capital Gains Tax
Post by: Analyst Group on June 05, 2015, 06:44:19 PM
Market on Monday big Red legti hay

Means buying opportunity.
Title: Re: CGT -- Capital Gains Tax
Post by: zakhan76 on June 05, 2015, 06:46:46 PM
I think textile and highly leveraged companies will be green...others might be red due to increase in CGT rates... :confused1:
Title: Re: CGT -- Capital Gains Tax
Post by: JF on June 05, 2015, 06:55:25 PM
Tax on Imports of AIR machinery abolished PIA enjoy
Title: Re: CGT -- Capital Gains Tax
Post by: Almaas on June 05, 2015, 07:02:47 PM
Capital gains tax imposed on sale of shares

For shares sold after two years, the rate of tax would be 7.5%. Previously, shares sold after a holding period of two years were exempted from tax.

For shares sold between 1-2 years, the rate would be 12.5% — increased from 10%. While, for shares sold within a year, the rate would be 15%.
DAY TRADING PY KIA TAX RATE HOGA.
Title: Re: CGT -- Capital Gains Tax
Post by: Analyst Group on June 05, 2015, 07:06:26 PM
Capital gains tax imposed on sale of shares

For shares sold after two years, the rate of tax would be 7.5%. Previously, shares sold after a holding period of two years were exempted from tax.

For shares sold between 1-2 years, the rate would be 12.5% — increased from 10%. While, for shares sold within a year, the rate would be 15%.
DAY TRADING PY KIA TAX RATE HOGA.

Up to 1 year - 15% (increased from 12.5% to 15%)
Title: Re: CGT -- Capital Gains Tax
Post by: zakhan76 on June 05, 2015, 07:09:59 PM
Rs700 billion allocated for Public Sector Development Programme

Amid last-minute changes to accommodate the prime minister, the federal government has allocated Rs700 billion for Public Sector Development Programme for the new fiscal year –up by 29% or Rs158 billion over outgoing fiscal year’s revised budget.

Good news for cement and steel sectors...
Title: Re: CGT -- Capital Gains Tax
Post by: Cheetah on June 05, 2015, 07:11:14 PM
Advance income tax is being introduced on stock market investment
Dividend income tax increases to 12.5% non filer 17.5%
Tax 10% on companies who do not pay dividend to the extent that their reserves increase above their paid up capital
35% tax for banks all source of income
CGT for securities held for less than 1 years increased to 15%, upto 2 years 12.5%, and for 2-4 years 7.5%
Title: Re: CGT -- Capital Gains Tax
Post by: JF on June 05, 2015, 07:11:35 PM
Also tax holidays for builders + blocks and concrete
Title: Re: CGT -- Capital Gains Tax
Post by: zakhan76 on June 05, 2015, 07:15:11 PM
Sutta mafia (cigarette) and mobile maniacs..will be taxed ...more than ever.... :tongue:
Title: Re: CGT -- Capital Gains Tax
Post by: Farooq Qadir on June 05, 2015, 07:28:22 PM
 
Banks, Textile, Cement and foods will be the beneficeries.  laoo maal………………….. :biggthumpup: :biggthumpup: :biggthumpup: :biggthumpup:
Title: Re: CGT -- Capital Gains Tax
Post by: Cheetah on June 05, 2015, 07:35:11 PM

 
Banks, Textile, Cement and foods will be the beneficeries.  laoo maal………………….. :biggthumpup: :biggthumpup: :biggthumpup: :biggthumpup:

banks kahan se benificiary hogaye bhai.. Banks ko tou mc BC
kardi
Title: Re: CGT -- Capital Gains Tax
Post by: Tariq Ahmed on June 05, 2015, 07:41:31 PM
Market tabah hogai CGT BHI bhar gya Dividend pe b tax bhar gya companies pe bhi tax lag gya 1000 points aram se loose karegi market Monday ko  huhu
Title: Re: CGT -- Capital Gains Tax
Post by: Stock_Cheeta on June 05, 2015, 07:43:09 PM

 
Banks, Textile, Cement and foods will be the beneficeries.  laoo maal………………….. :biggthumpup: :biggthumpup: :biggthumpup: :biggthumpup:

banks kahan se benificiary hogaye bhai.. Banks ko tou mc BC
kardi
us se bhi agye wali krdi he huhu huhu
Title: Re: CGT -- Capital Gains Tax
Post by: sabir.hussain on June 05, 2015, 07:44:46 PM
Market tabah hogai CGT BHI bhar gya Dividend pe b tax bhar gya companies pe bhi tax lag gya 1000 points aram se loose karegi market Monday ko  huhu
bop ko 7 kero me nay buy krna hay 100k :biggthumpup:
Title: Re: CGT -- Capital Gains Tax
Post by: lovegreen on June 05, 2015, 07:46:57 PM
rumours capital gain tax will be increase 15%

confirmed yes it is increased to 15%

DIVID per bi tax berha dia hay 2.5% increased
All rumors r truth now.

Companies are forced to give DIVID to share holder if not then tax will be imposed
Title: Re: CGT -- Capital Gains Tax
Post by: lovegreen on June 05, 2015, 07:48:38 PM
rumours capital gain tax will be increase 15%

confirmed yes it is increased to 15%

DIVID per bi tax berha dia hay 2.5% increased
All rumors r truth now.

Companies are forced to give DIVID to share holder if not then tax will be imposed
Ab ayega maza textile sector choor group earning ka mza khud he laitay thay. Bohat he kum companies dividend daite then. Sahee pkra hai jis jis company ne sirf khude ayashi ke. Specially Textile sector along with some other sectors.
Title: Re: CGT -- Capital Gains Tax
Post by: afzalch on June 05, 2015, 07:50:04 PM
Textile and constructions sectors will benefit more
Title: Re: CGT -- Capital Gains Tax
Post by: lovegreen on June 05, 2015, 07:51:44 PM
Market tabah hogai CGT BHI bhar gya Dividend pe b tax bhar gya companies pe bhi tax lag gya 1000 points aram se loose karegi market Monday ko  huhu
bop ko 7 kero me nay buy krna hay 100k :biggthumpup:
Ye ab aap gam ghalat ker rhay han (proverb)  :D  :D .
Title: Re: CGT -- Capital Gains Tax
Post by: Tariq Ahmed on June 05, 2015, 07:52:56 PM<