PSX wants govt to review CGT rates
The Pakistan Stock Exchange (PSX) asked the government on Thursday to align the rates of capital gains tax (CGT) on the disposal of shares with those on the sale of immovable property.
In its proposals for the 2022-23 budget, the only stock exchange of the country asked the finance ministry as well as the corporate regulator and the Federal Board of Revenue to eliminate the tax-driven distortion between different asset classes.
In addition, it asked the government to impose CGT on all derivates and future contracts traded on the PSX in line with that imposed on future commodity contracts traded on the Pakistan Mercantile Exchange.
The national bourse submitted 11 budgetary proposals in total, including the introduction of registered savings
and investment accounts and individual savings account. These schemes will help channel capital that's currently invested in unproductive areas and from the large undocumented sector into productive parts of the economy, it said.
Another proposal by the PSX related to the grandfather tax treatment of companies when they apply for listings on the exchange. It means no new cases for past tax returns should be opened, except for such pending cases in which proceedings have already been initiated.
It asked the government to enhance the tax credit for listed small and medium enterprises (SMEs).
The national bourse witnessed across-the-board profittaking on Tuesday as the index failed to sustain momentum from a day ago, said JS Global in a research note. The reasons for the dip in share prices included investors' fear about the impact of the end of industrial subsidies and deep cuts in the development programme to ensure the resumption of the International Monetary Fund loan package.
According to Ahsan Mehanti of Arif Habib Corporation, the latest current account deficit number, growing circular debt and a slump in global crude oil prices also played the role of a catalyst in the bearish close of the benchmark.
As a result, the KSE-100 index settled at 45,817.68 points, down 255.57 points or 0.55 per cent from a day ago. The trading volume decreased 43pc to 210.2 million shares while the traded value went down 35.6pc to $33.5m on a day-on-day basis. Stocks contributing significantly to the traded volume included G3 Technologies Ltd (18.85m shares), Lotte Chemical Pakistan Ltd (17.91m shares), Hum Network Ltd (14.29m shares), WorldCall Telecom Ltd (11.61m shares) and Telecard Ltd (11.42m shares).
Sectors that took away the highest number of points from the benchmark index included oil and gas exploration (64.64 points), technology and communication (38.68 points), power generation and distribution (36.02 points), cement (33.2 points) and oil and gas marketing (21.62 points). Shares contributing most negatively to the index included The Hub Power Company Ltd (28.83 points), TRG Pakistan Ltd (24.82 points), Pakistan Petroleum Ltd (23.26 points), Lucky Cement Ltd (22.38 points) and Pakistan Oilfields Ltd (19.2 points).
Stocks that contributed most positively to the index included Engro Fertiliser Ltd (30.52 points), Fauji Fertiliser Company Ltd (20.56 points), Bank Alfalah Ltd (15.02 points), Lotte Chemical Pakistan Ltd (14.42 points) and Engro Corporation Ltd (9.31 points).
The Asian Development Bank (ADB) disbursed loans and grants amounting to $1.31 billion to Pakistan in 2021, comprising $0.30bn in programme lending, $1.01b from project lending and $3m from grants. Total outstanding balances and undisbursed commitments of ADB's nonsovereign transactions in Pakistan as of Dec 31, 2021 was $441.31m, representing 3.14pc of ADB's total private sector portfolio, the fact sheet on Pakistan says.