Mini-budget expected to announce incentives to bolster capital markets

As per an official, over-regulation of brokers would be controlled to facilitate equity investments


ISLAMABAD: The forthcoming mini-budget slated to be announced on Wednesday is expected to extend relief and incentives to the capital markets and decrease the advance tax on sale and purchase of shares.

Also, sources said the rates of advance on sale and purchase of securities have been proposed to be decreased from 0.02% to 0.01% on the value of sale and purchase of shares considering during day trading only one side commission is being charged by the broker.

Moreover, this advance tax isn’t leviable on proprietary trades since they do not grant any brokerage commission.

The mini-budget is expected to announce that stock players will be permitted to carry forward capital losses up to three years for capital gain tax (CGT) purposes, reports an English daily.

The abolition of restrictions on carry forward of capital losses has remained a long-established request of the broker community and reports indicate that the government will make revisions in the ITO to permit the carry forward of capital made on the sale of securities.

Furthermore, the CGT is going to be rationalized at the same level with real-estate.

According to brokers, the tax inconsistency between several asset classes is dissuading the public from investing in the capital market.

Moreover, the tax rates on gains made on the sale of securities and immoveable property are being regulated by bringing tax rate for immoveable property at parity with securities.

As per an official, over-regulation of brokers would be controlled to facilitate equity investments.

Also, the mechanism for renewal of licence for brokers has been made easy, which would allow securities broker licence to be renewed upon submission of minimal documents along with token fines.

And a completely fresh section of eligible securities has been introduced in the Margin Trade and Deliverable Futures Market to raise activity and liquidity.