FBR to impose 20% tax on early disposal of government debt securities

The Federal Board of Revenue (FBR) has announced a 20 percent tax on capital gains from the early disposal of federal government debt securities, specifically when sold within a six-month period. 

This change, outlined in an income tax circular, comes as part of the provisions under the Finance Act 2025.

Before the new regulations, non-resident individuals without a permanent establishment in Pakistan who invested in government debt securities through Special Convertible Rupee Accounts (SCRA) were taxed at a flat 10% rate, regardless of how long the securities were held. 

Under the revised rules, the 10% tax rate will now apply only to securities held for more than six months.

However, any capital gains made from securities sold within six months will now be taxed at 20%. This adjustment aims to discourage short-term speculation and encourage longer-term investments in government securities, while also boosting the government’s revenue.