ISLAMABAD, Sept 12: The Federal Board of Revenue (FBR) on Wednesday issued Capital Gains Taxation (CGT) Rules on Securities’ Trading incorporating all amendments proposed by the Securities and Exchange Commission of Pakistan (SECP) to facilitate investors of the country’s stock exchanges.

The provisions of the new CGT rules will be applicable from April 24, 2012. Following the request of the SECP, FBR made the necessary changes in CGT rules to smooth the process of collection of CGT from stock market investors.

SECP had recommended certain changes in CGT rules for documentary trail of undocumented income, correction of anomaly where exempt gains in past were not documented, higher revenue for the government, broadening the tax-base, depth in trading volume, efficient price discovery, efficient capital formation and resource allocation, higher possibility for privatization and attraction of foreign portfolio investment.

Taking into account the suggestions made by SECP, FBR was able to finalize the viable CGT rules which have now been notified by the tax authorities.

Sources said that the issuance of these rules and amendments to the Income Tax Ordinance 2001 were made to remove the anomalies identified in the previous CGT regime. The matter was raised by SECP keeping in view the difficulties faced by investors while complying with the taxation provisions. New amendments have been introduced with the collaboration with FBR, NCCPL, CDC and other stakeholders.

These changes are expected to have a positive effect on investors’ confidence, stock market trading volumes and should ensure 100 per cent collection of tax on securities’ trading, sources said.

FBR issued amendments to the Income Tax Rules 2002 relating to the Capital Gain Taxation (CGT) on securities’ trading vide SRO 1119(I)/2012 dated September 12, 2012.