FBR to al­low NCCPL to ver­ify tax li­a­bil­i­ties, re­funds

Enterprise - - National news -

The Fed­eral Board of Rev­enue (FBR) pro­posed a law that will en­able the Na­tional Clear­ing Com­pany of Pak­istan Lim­ited (NCCPL) to ver­ify the tax li­a­bil­i­ties and com­pute re­funds of mem­bers and in­vestors of Pak­istan Stock Ex­change (PSX) and Pak­istan Mer­can­tile Ex­change (PMEX).

The FBR, in the draft amend­ments into the In­come Tax Rule, 2002, said the NCCPL will ver­ify the tax li­a­bil­i­ties cal­cu­lated by as­set man­age­ment com­pa­nies and PMEX. “It (NCCPL) will com­pute the net cap­i­tal gains, tax li­a­bil­ity or re­fund for each in­vestor to be col­lected from or re­funded to the as­set man­age­ment com­pa­nies or PMEX,” said the draft.

The amend­ments will au­tho­rise the FBR to di­rectly ob­tain in­for­ma­tion from the NCCPL re­gard­ing mem­ber, bro­ker and in­vestors of the PSX as well as mem­bers of PMEX and unit hold­ers in mu­tual funds.

Un­der the new amend­ments, a PSX or PMEX in­vestor has to sub­mit af­fi­davit of true dec­la­ra­tion re­gard­ing se­cu­ri­ties’ trans­ac­tion con­ducted dur­ing the tax pe­riod as per the ledger state­ment and Cen­tral De­pos­i­tory Com­pany’s state­ments.

The FBR said the amend­ments will be im­ple­mented af­ter seven days in con­sul­ta­tion with the stake­hold­ers and al­low the NCCPL to reg­u­late the PMEX mem­bers. The FBR said if cu­mu­la­tive yearly re­fund per in­vestor is be­low Rs1,000, then it will be car­ried for­ward for ad­just­ment in the next month. “How­ever, any re­funds, ir­re­spec­tive of the amount, shall be re­funded at the year end,” it added.

Cur­rently, the NCCPL is reg­u­lat­ing only PSX mem­bers on be­half of the FBR. The NCCPL will is­sue a cer­tifi­cate of cap­i­tal gains to a tax­payer to cer­tify that the tax is de­ducted and de­posited into the na­tional ex­che­quer.

“In case of port­fo­lio trans­fer where own­er­ship of se­cu­ri­ties is not changed then no cap­i­tal gain tax will be com­puted,” the draft law said. “In such a case, the date and cost of ac­qui­si­tion of the se­cu­ri­ties shall not be changed ow­ing to such port­fo­lio trans­fer.”

In other cases, in­clud­ing trans­fer by in­vestor from one fund in an as­set man­age­ment com­pany to an­other fund main­tained by same or an­other as­set man­age­ment com­pany, such trans­fer will be treated as dis­posal and will be taxed ac­cord­ingly.

The FBR said units of open-end mu­tual funds and fu­ture com­mod­ity con­tracts have been brought un­der NCCPL from July 1, 2016. “Ac­cord­ingly, the in­vestor will be en­ti­tled to have the cap­i­tal loss ad­justed against the cap­i­tal gain, while NCCPL will cal­cu­late cap­i­tal gains tax li­a­bil­ity af­ter ad­just­ment of cap­i­tal losses for the year,” it said.

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