ISLAMABAD: The business-friendly mini-budget presented on Wednesday has been well received by the stockbrokers, as it offers them some major concessions.
The latest amendment in the finance bill proposes to abolish the Advance Income Tax under section 233 A of the Income Tax Ordinance – a long-standing demand of the stock broker community.
Federal Board of Revenue’s Member Policy Dr Hamid Atiq said the annual collection from this tax was only Rs30 million so it won’t have much impact on the overall revenue proceeds.
Welcoming the move, one broker said the abolishment of 0.02pc advance tax would help reduce the cost of doing business and encourage the day traders which will eventually increase market volume.
“The increase in volume will lift sentiments about the Pakistan Stock Exchange and increase revenues from capital gains tax,” brokers said.
Abolition of withholding tax on members of stock exchange in lieu of their commission (income from commission would continue to be taxed under normal law), brokers feel it would reduce the documentation hassle.
The second main relief proposed is the permission to carry forward losses sustained in a year up to subsequent three years. Another positive for the capital markets is the reduction of tax on inter-corporate dividend in case of companies availing group relief as the companies were subjected to double taxation.
Published in Dawn, January 24th, 2019