ISLAMABAD, April 18: The Securities and Exchange Commission of Pakistan has approached the provincial governments for total abolition of stamp duty on the memorandum and articles of association of companies to facilitate the incorporation of companies by the businessmen, an official source stated here on Friday.
The Commission, in its earlier move last year, had secured reduction in the rates of stamp duty by the governments of Sindh and Balochistan. This action in NWFP was considered necessary because the rates in that province were already low.
As a result, the number of newly incorporated companies registered a substantial rise. During nine months of 2002-03, 398 companies were incorporated in Sindh and 11 in Balochistan, as against 327 and six companies incorporated, respectively, during the same period of previous year.
Meanwhile, the Commission has streamlined its own procedures at the offices of registrar, companies, for expeditious finalization of applications for incorporation. In the past, the time involved in the incorporation of companies in those offices was two weeks.
That period has since been curtailed to only two days, thanks to a series of measures adopted to improve efficiency and transparency in those offices.
The Commission, the source said, wanted to ensure that a company was registered in a single day in order to encourage the owners of businesses to convert their enterprises into companies.
One of the main hindrances in this connection, however, is the requirement of affixing of the special adhesive stamps on the memorandum and article association of the proposed companies. This procedures, it has been observed, involves a lengthy and troublesome procedure, whereas the total revenue collected by the provinces on this account is very insignificant, the source argued.
The SECP has, therefore, taken up this issue with the finance ministers of Punjab and NWFP to do away with the stamp duty altogether. The Commission was also in touch with the finance ministers of Sindh and Balochistan for removal of the difficulty faced by the investors/promoters of companies, according to the source.
