ISLAMABAD, June 2: The Securities and Exchange Commission of Pakistan and the Central Board of Revenue will set up a joint task force to review the tax structure from the angle of corporate sector development after the budget.
While disclosing this during an interview with a group of newsmen here on Wednesday, SECP Chairman Dr Tariq Hassan said he had discussed with the CBR chairman the desirability of meshing the requirements of the corporate sector with the taxation perspective.
He disclosed that nearly 85 per cent of suggestions of the corporate sector, which were recommended to the CBR, had been accepted while others had been held over for further information and dialogue.
In this regard, Dr Hassan appreciated the cooperative attitude of the revenue collecting agency. These proposals, he hastened to add, were not automatically forwarded by the SECP but were recommended after thorough scrutiny and analysis.
As it was the mandate of the SECP to strive for the development of the corporate sector, its chairman explained that his taxation proposals were driven by four objectives, namely: Encouragement to single-member countries (SMC) to corporatize themselves; progression of capital market entities from SMCs up to the level of listed companies; equal tax treatment for all NBFCs and banking companies; and same tax incentives for banking and non-banking companies.
The SECP chairman affirmed that he had submitted a proposal to prescribe a minimum holding time for stock market shares. The objective is to bring stability in stock trading. "How would investment benefit the national economy if it did not remain in the system for some time?" he wondered.
Whether or not it will be accepted by the government will not diminish the need of such a measure, he observed.
PENSION SCHEME: The SECP has submitted a private pension scheme that has been accepted by the government. It might figure in the finance minister's budget speech.
When asked about the National Commodity Exchange Limited, Mr Hassan said it would start functioning next month with gold and cotton yarn. When his attention was invited to Aptma's criticism, he said Aptma had conveyed its reservations in a letter, but it had not given any reason thereof.
Likewise, the Karachi Cotton Association had expressed its keenness to set up a cotton exchange of their own. While it has a good deal of experience in this field, Dr Hassan remarked, he would like to consider the proposal in the context of its future operation.
In reply to a question, the SECP chairman said that he had received an interim report from the committee on demutualization of stock exchanges in Pakistan. The report had, however, merely identified the issues.
Mr Hassan said he had suggested to committee's chairman Shamim Ahmed Khan to pay visits along with the chairmen of three stock exchanges to some of the countries, which had already demutualized their bourses for probing the implementability in this country of various features of the system.
He said the committee was expected to submit its final report by the end of this month. Meanwhile, Mr Hassan has also asked the committee to start transmitting its recommendations as and when these are finalized so that the SECP may start processing these, instead of waiting for the complete report.
"This is also necessary because the stock exchanges have voluntarily commenced work on their merger and establishment of a national stock exchange. We welcome their initiative which also shows they accept our proposal," he added.
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