KARACHI: The government has waived income tax on profit earned from investments in debt market by non-resident Pakistanis through Roshan Digital Accounts (RDA), sources said on Wednesday.
The sources said the cabinet approved a tax amendment ordinance to give go-ahead to certain tax exemption and concessions on investments through RDAs. The sources said ordinance would be promulgated in a day or two after signing by the president. Using their RDAs, non-resident Pakistanis can avail digital banking facilities, including access to online banking, domestic funds transfer, utility bills and tuition fee payment in Pakistan, as well as investments in government bills, stock exchange, and real estate sector with option of full repatriation.
Foreign exchange inflows through RDAs have already crossed $400 million since the launch of the initiative in September last. So far the total number of accounts opened for RDAs reached 80,000, according to the SBP. Tax exemptions of 10 to 15 percent are applicable on profit made from deposits in the banking system. According to the sources, the government also approved concessions to investment made through RDAs. This will include a reduction in tax rate from 15 percent to 10 percent on capital gain on disposal of shares in the stock market, which will be the final tax. Further, taxation of sale and purchase of immovable property at one percent has been suggested that will be final tax in lieu of the capital gain tax. The tax amendment ordinance would also allow reduction in tax rate from 20 percent to 10 percent on profit on debt from Naya Pakistan Certificates as final tax.
The amended law would allow waiver from filing of return to non-resident RDA holders and resultant investors in shares, Naya Pakistan Certificates and immovable property. The non-residents would be allowed on ATL in order to avoid higher tax rates. The amendment would allow exemption to Islamic Naya Pakistan Certificate Company Limited from corporate income tax, minimum tax on turnover, and withholding taxes.
The government launched Naya Pakistan certificates to offer attractive investment opportunities to overseas Pakistanis and resident Pakistanis with assets held abroad. These certificates are available in conventional and shariah-compliant versions.
NPCs are sovereign instruments, denominated in dollar and rupee, issued by the government and can only be purchased through Roshan digital accounts. NPCs offer attractive returns over different maturities. Resident Pakistanis who have declared their assets abroad can also invest in USD denominated NPCs.
The minimum investment in USD denominated certificates is $5,000 which can be increased by integral multiples of $1,000 with no maximum limit. For PKR denominated certificates the minimum investment is Rs100,000, which can be increased by integral multiples of Rs10,000 with no maximum limit. Islamic Naya Pakistan certificates offer rates of 5.5-7 percent on USD and 9.5-11 percent on PKR denominated certificates.
A general view of pipelines on the gas storage facility at the gas trading company VNG AG in Bad Lauchstaedt, Germany...
Gold bars from the vault of a bank are seen in this illustration picture taken in Zurich, Switzerland, on November 20,...
David Sacks during 2016 TechCrunch Disrupt in San Francisco, California, U.S. September 13, 2016.—...
Partly finished vehicles are seen at a manufacturing plant in this undated file photo. — APP/FileLAHORE: The decline...
A person enters the building of the Washington-based global development lender, The World Bank Group, in Washington....
A woman carries a child as she votes at a polling station during the presidential and parliamentary election, near...