Daily Times

An important recommendation has been made by the Pakistan Stock Exchange (PSX) to address economic difficulties, strengthen the national economy and increase the capital markets in 2022-23 federal budget For the sake of both tax income and achieving significant social goals, PSX recommends that the ideas be implemented. They have been sent to the Federal Minister of Finance and Revenue, the Chairman of SECP, and the Chairman of FBR for their review and consideration. A broad and well-functioning capital market is necessary for the effective growth of any contemporary economy, according to them. The recommendations were developed in light of the country’s current economic difficulties.

As a major economic sector, the stock market is well recorded. In keeping with FBR’s attempts to broaden Pakistan’s tax base, the stock market and all of its stakeholders, investors and issuers, are thoroughly documented and adhere to applicable tax regulations. There must be an efficient, equitable, and broad-based tax structure in place, however, if corporatization and the capital markets are to flourish. As a result of these hurdles and disincentives, the capital market, business sector, and general economy have been slowed. PSX has proposed budgetary measures to address these issues. There are numerous benefits for the economy as a whole if these recommendations are put into practice. The PSX has proposed 11 capital market-related budgeting measures for 2022-23. The following are some of the most important proposals:

Capital gains tax (CGT) rates on the sale of securities should be aligned with those of other regional exchanges and OECD nations and with the rates of CGT on the sale of movable property.

Regulated savings accounts (RSIA) and Individual savings accounts have been introduced (ISA). To allow companies to retain their current tax status when they request to be listed. Rate rationalisation for publicly traded enterprises. Listed enterprises will be exempt from the minimum tax regime. Making the tax burden on corporations more equitable. In the Council of Common Interest, jurisdictional concerns relating to provincial sales taxes on services will be discussed.

Tax-driven disparities between asset classes are to be eliminated by aligning CGT on securities sales and the sale of real estate with that of other regional exchanges, introducing RSIAs and ISAs to help direct savings toward more productive investments, no new cases for past tax returns will be opened in order to facilitate tax status at the time of a sale.

Farrukh H. Khan, the managing director of the Pakistan Stock Exchange (PSX), claimed that no contemporary economy can expand and enhance savings and investment rates without robust and well-functioning capital markets. Although the stock market is the most well-documented part of the economy in Pakistan, it is nonetheless treated unfairly. Tax and anti-money laundering (AML) disparities exist amongst asset classes that must be addressed if we are to allocate resources more efficiently.

The economy will be better recorded, resulting in more tax collection as the capital markets develop. Each and every one of PSX’s budget suggestions is revenue-neutral. Only a level playing field and no subsidies are what we are looking for. As a regulator, PSX is eager to see that the required reforms are enacted in the taxation system to ensure that all asset classes are taxed in the same manner.” Increased tax revenue and expansion in the capital market will be made possible by this, as well as effective resource allocation and documentation of the economy.