Stockbrokers seek tax relief in next budget

ISLAMABAD: The stockbrokers have asked the government to provide tax incentives to encourage investments in the stock market.

A delegation of the Pakistan Stockbrokers Association (PSBA) met Finance Minister Shaukat Tarin on Wednes­day and presented their budget proposals for 2022-23.

They said that the current high rate of Capital Gains Tax of 12.5 per cent was discouraging investments in the capital market.

“For encouraging investments in equities for a longer period there should be no tax where the holding period is for three years and above, while it may be 5pc where the holding period was between two and three years.”

The association noted that it was difficult for non-resident Pakistanis to file returns in the absence of any other source of income.

“As such for investment in stocks they may be treated on a par with the filers. This would encourage remittance of foreign exchange to Pakistan and investment in the capital market,” the budget proposal added.

The association has also asked the government to rationalise the current tax rate on dividends to 10pc from the existing 25pc, but it was 50pc for non-filers. It has also added that there should not be any withholding tax on dividends up to Rs1 million per annum.

It also demanded that tax on brokerage and commission be reduced to 3pc compared to the present rate of 12pc.

Mr Tarin said the government was encouraging investment and enlisting of entities on the stock exchange.