KARACHI: The federal budget for 2018-19 has disappointed the stockbrokers/TREC holders of Pakistan Stock Exchange (PSX) as most of its proposals were ignored, says a PSX release here Monday.
This is reflected by the index ending in negative territory. The general feedback of the investors was that frequent changes in the Capital Gains Tax (CGT) regime has hurt the confidence of the investors. The tax paid dividend continues to be taxed at a higher rate without taking into account that the dividend is distributed out of the tax paid income of the listed companies.
The higher the rate of CGT regardless of its holding period as against the previous holding period at various slabs and longer holding period has resulted in drastic fall of turnover.
Last year CGT collection was about Rs18 billion whereas currently, it is just a little over Rs1 billion. The net effect is that the government is the main loser and will continue to lose.
The stockbrokers/TREC holders request the Finance Minister to take remedial measures before the budget is adopted by the parliament, the release concluded.
