Hammad Kehar, President, Munir Khanani, Vice President and the entire Managing Committee of PSX Stockbrokers Association are appreciative to the efforts of Asad Umer, Finance Minister, and Hammad Azhar, State Minister for Revenue, for presenting the Economic Reforms Package in which numerous recommendations given by the PSX stockbrokers association have been incorporated.
“We hope that the remaining recommendations will also be included in near future which would boost the economy, promote investments and help in creating employment opportunities” they added.
They said “Investment friendly Economic reforms 2019 was presented on January 23, 2019 in National Assembly where PM and his financial team delivered what was committed during various meetings with the Association.
Finance Minister, in his budget speech, followed by budget document has incorporated following requests from Stock brokers:
Advance Tax under Section 233A of the Income Tax Ordinance be abolished
w.e.f. February 01, 2019
This tax was imposed on value of securities purchased & sold thereby increasing cost of doing business. By virtue of this tax volumes dried up resulting in significant drop in revenues of stockbrokers, PSX, SECP and FBR. There will be no loss of revenue to GOP based on the fact that after reducing cost of doing business, day traders will enter in the market who will generate double volumes which will eventually benefit GOP and FBR will be compensated through capital gain tax due to substantial increase in volumes.
Carry forward of losses sustained on disposal of securities in tax year 2019
Business losses all over the world, including Pakistan, are allowed to be carried forward. In Pakistan all business losses are allowed to be carried forward for 6 years except for business loss on disposal of securities. This anomaly has now been rectified and carry losses for 3 years rather than 6 years allowed. It will be a big source of relief as stock market under performed and huge losses incurred.
Inter corporate dividends exempted from tax
The long outstanding request based on inequality and double taxation, discouraging holding company concept has been endorsed by GOP.