Amendment to improve CGT calculation

KARACHI: The Federal Board of Revenue (FBR) on Wednesday proposed an amendment into a customs law to help the National Clearing Company of Pakistan Limited (NCCPL) improve calculation of capital gains tax on securities. 

A notification said the amendment into the Customs Rules 2002 has been proposed, “to enable the NCCPL to rectify an error in recording of the date of acquisition and disposal of securities for the purpose of calculating capital gains tax.”

“According to the amendment proposed through S.R.O. NZ/ (1)12016, in case an error is pointed out or found in recording the date of acquisition of security, National Clearing Company of Pakistan Limited may with the prior approval of the Commissioner Inland Revenue rectify the dates based on confirmation from the Central Depository Company (CDC) and accordingly re-compute the capital gains tax,” said the notification. 

The National Clearing Company of Pakistan Limited is the collecting agent of capital gain tax on disposal of securities for the Federal Board of Revenue (FBR).

“Moreover, where securities of an unlisted company are converted into electronic form, the cost of acquisition of such securities would be the market price at which the security is listed on the stock exchange and the date of acquisition will be the date of acquisition as available with CDC,” it added.

The FBR also proposed the procedure of determining sales transactions of securities of an unlisted company after its conversion into the listed company.

“National Clearing Company of Pakistan Limited will compute holding period as available with the Central Depository Company and at the acquisition price at which the security is listed on stock exchange and the computation of capital gains and tax thereon,” it said.