Sales tax on Modarabas opposed

KARACHI: Securities and Exchange Commission of Pakistan (SECP) Chairman Policy Board Khalid Mirza said on Monday that an imposition of sales tax on Non-Banking Financial Institutions (NBFIs) and Modarabas should be shelved as these institutions did not provide services.

Speaking at the launch of Year Book-2018 of NBFIs and Modaraba Association of Pakistan, Mirza said the NBFIs and Mobarada companies should oppose the proposed sales tax under Sindh budget 2019/20, as the companies were providing financial support rather than services as assumed by the government.

He further said that NBFIs and Modaraba helped attain the objective of macroeconomic policies by creating more jobs in the country by promoting SMEs.

Earlier, NBFI and Modaraba Association Chairman Raheel Q Ahmad said the core business of NBFI and Modaraba Sector was the SMEs which were the backbone of Pakistan’s economy, as this sector played a significant role in development.

NBFI and Modaraba sector were active financiers of SMEs and had disbursed over Rs200 billion in the last ten years. The total number of investors in PSX was 231,793 whereas the NBFI and Modaraba sector has 86,473 investors, which comes to 37 percent of it. SECP Executive Director Mussarat Jabeen read the message from the SECP chairman Farrukh H Sabzwari and said leasing companies and modarabas form an important part of the non-banking financial sector.