KARACHI (June 05 2008): The government's decision to retain the current tax regime for capital markets will contribute more revenue than imposition of capital gains tax on listed shares. This was stated by Karachi Stock Exchange Managing Director Adnan Afridi while speaking at a press conference at KSE building here on Wednesday.
He pointed out that according to the decision taken in the meeting of KSE delegation with the Finance Minister and the members of Economic Advisory Council (EAC), the government owned companies will start investing in the equity market from next month.
He said that these corporations, companies and entities such as EOBI, State Life Insurance Corporation, port authorities, OGDCL, PIA, Pakistan Steel Mill and others will invest up to 25 percent of their retirement and long-term funds in the equity markets in a phased manner.
He welcomed the government decision to continue with the on-going incentives for the capital market including extension in capital gain tax (CGT) exemption for another two years. He pointed out that presently the stock market players are paying six direct taxes to the tune of Rs 5 billion.
He said that the capital market had attracted more than $1 billion of foreign investment last year which declined to a negative $84 million this year. He said that the government has constituted a committee comprising capital markets and government representatives to develop a three-year capital markets policy within three months. The policy will focus on tax reforms, promotion of new listings, integration of capital market with the national economy and other measures to ensure a sustainable and healthy capital market for the long-term.