Major relief for investors: CGT rate on shares to be slashed by 3%
KARACHI: The government has decided to provide a major relief to capital...
KARACHI: The collection of capital gains tax (CGT) has registered a decline of 7 per cent during the fiscal year 2020/21, despite a massive growth in the stock market during the year under review.
According to the statistics made available to BOL, the collection of the capital gains tax stood at Rs1.82 billion during the fiscal year 2020/21, compared with Rs1.94 billion in the preceding fiscal year.
Officials at the Federal Board of Revenue (FBR) said the tax revenue under this head was reduced due to the changes made through the Tax Laws (Amendment), Ordinance, 2021 issued in February 2021.
Another reason for the lower tax revenue was the introduction of a law in January 2019 by the government to allow carry forward losses. However, the revenue board recently amended the Income Tax Rules, 2002 to incorporate the laws for carry forward losses.
The overall performance of the Pakistan Stock Exchange (PSX) posted a 38 per cent return in the fiscal year 2020/21, which was the highest after the fiscal year 2013/14.
The benchmark KSE-100 index closed the year with a positive return, posting a striking jump of 38 per cent, analysts at Arif Habib Limited said.
The benchmark index closed at 47,356 points, marking the highest-ever June-end closing level, while the market returns (+38 per cent) is the highest after 2013/14 (+41 per cent).
The analysts also said the market sentiment was tested several times during the year, including political unrest witnessed, amid alliance of opposition parties under the banner of Pakistan Democratic Movement in the lead up to the Senate elections in March 2021, and re-emergence of the Covid waves.
Albeit, the economic revival remained a key theme throughout the fiscal year under review, aiding the bullish climate at the bourse.
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