‘New tax regime in line with changing economics’

ISLAMABAD: The government is considering to introduce new tax regime that is in accordance with the changing economic environment, the finance minister said on Monday.

Welcoming the budget proposals of Pakistan Stock Exchange (PSX), Finance Minister Shaukat Tarin said these will be given due consideration in the upcoming budget. In a meeting with PSX Managing Director / CEO Farrukh Khan, Tarin said the present government is strongly committed to strengthening of the financial markets and is ready to adopt measures that could mobilise capital to more productive sectors.

Khan said a broad-based capital market helps in achieving important economic and social objectives like increasing the number of tax payers, optimising savings and investment rates, and reducing wealth inequalities.

Tax measures are an important policy tool to increase investments and savings in the economy and to stay competitive with other markets. PSX budget proposals want alignment of capital gain tax rates on disposal of securities in line with regional practices, rationalisation of tax rates for companies listed on the stock exchange, enhanced tax credit for listed small and medium enterprises, unlocking the potential of private funds and many other suggestions that will help broadening the tax base/ revenue collection.

PSX budget proposals focus on impediments and disincentives that are negatively impacting the development of the capital market, as well as the documented corporate sector.

PSX proposed capital gains tax for listed securities should be aligned with that of other asset classes and brought in line with international levels. A reduction or a time bound elimination of CGT will attract new local and foreign investors, without any significant loss of tax revenue and will increase tax revenue in the medium term.