0.3pc WHT not applicable on stocks investors
Monday, 14 June 2010
KARACHI, June 13 (Business Recorder): The Federal Board of Revenue (FBR) has said that the 0.3 per cent withholding tax on bank cheques, online transfers, pay orders, etc, will not be applicable to stock investors.
Member Direct Tax, FBR Israr Rauf during his meeting with KSE members here Saturday said this tax is only for cash transactions and will not be applicable for interbank transactions of the stock investors.
Various issues relating to imposition of taxes and others were discussed during the meeting. KSE members raised the issue of imposition of capital gains tax (CGT) and said that it should be imposed according to the agreement with the former finance minister Shaukat Tarin and the shares purchased before June 30, 2010 should be exempted from this tax.
However, Israr told the meeting that it would depend upon the Senate and National Assembly what they decide. However, he asked the KSE board to send their proposals regarding imposition of CGT and other issues.
The FBR would discuss these issues with the finance ministry and other concerned authorities.
KSE members showed concern that paying quarterly advance tax would be too problematic for the retail investors. However, FBR official said that the quarterly statement is a self-assessment and there is no need to give supporting documents.
It is just 2 per cent if shares sold within 6 months and 1.5 per cent between 6-12 months. On strong opposition from members, FBR officials said that they will get back to KSE soon on this matter after discussing internally.
The brokers also wanted FBR not to ask source of income for assets as of June 30, 2010. They said that as this gain was exempted for last more than 3 decades, investors have not declared this in their tax returns.
The FBR officials said that as far as investors can justify those gains then no question will be asked. Here again FBR will clarify this matter in coming days. Regarding tax on foreigners, the FBR official said that all investors will pay tax.
Regarding the currency loss or gain, FBR believed that currency indexation is only done if foreigners re-invest. FBR has agreed that they will clarify this matter in next few days.
The meeting also discussed the issue of Senate standing committee recommendation that CGT should also be applicable on shares purchased before July 1, 2010. This is contrary to the understanding reached between KSE and finance ministry in February 2010 according to which CGT will be applicable on share purchases on or after July 1, 2010.
On this issue, the FBR official said that it depends upon the upper and lower house what they decide as the Finance Bill has yet not been passed by the parliament. Talking to media after meeting, the KSE Managing Director, Adnan Afridi, said that the agreement with former finance minister Shaukat Tarin should be fully honoured and the shares purchased before June 30, 2010 should be exempted from capital gains tax.
Member Direct Tax, FBR Israr Rauf during his meeting with KSE members here Saturday said this tax is only for cash transactions and will not be applicable for interbank transactions of the stock investors.
Various issues relating to imposition of taxes and others were discussed during the meeting. KSE members raised the issue of imposition of capital gains tax (CGT) and said that it should be imposed according to the agreement with the former finance minister Shaukat Tarin and the shares purchased before June 30, 2010 should be exempted from this tax.
However, Israr told the meeting that it would depend upon the Senate and National Assembly what they decide. However, he asked the KSE board to send their proposals regarding imposition of CGT and other issues.
The FBR would discuss these issues with the finance ministry and other concerned authorities.
KSE members showed concern that paying quarterly advance tax would be too problematic for the retail investors. However, FBR official said that the quarterly statement is a self-assessment and there is no need to give supporting documents.
It is just 2 per cent if shares sold within 6 months and 1.5 per cent between 6-12 months. On strong opposition from members, FBR officials said that they will get back to KSE soon on this matter after discussing internally.
The brokers also wanted FBR not to ask source of income for assets as of June 30, 2010. They said that as this gain was exempted for last more than 3 decades, investors have not declared this in their tax returns.
The FBR officials said that as far as investors can justify those gains then no question will be asked. Here again FBR will clarify this matter in coming days. Regarding tax on foreigners, the FBR official said that all investors will pay tax.
Regarding the currency loss or gain, FBR believed that currency indexation is only done if foreigners re-invest. FBR has agreed that they will clarify this matter in next few days.
The meeting also discussed the issue of Senate standing committee recommendation that CGT should also be applicable on shares purchased before July 1, 2010. This is contrary to the understanding reached between KSE and finance ministry in February 2010 according to which CGT will be applicable on share purchases on or after July 1, 2010.
On this issue, the FBR official said that it depends upon the upper and lower house what they decide as the Finance Bill has yet not been passed by the parliament. Talking to media after meeting, the KSE Managing Director, Adnan Afridi, said that the agreement with former finance minister Shaukat Tarin should be fully honoured and the shares purchased before June 30, 2010 should be exempted from capital gains tax.