Stock Market is set to receive some relief in the upcoming budget for the year 2018-19. The news was shared by Miftah Ismail, special advisor to the Prime Minister on Finance, today.
Miftah told that Pakistan’s economy saw a good growth and collection of revenue in the past four years. To pass on this relief, the government will consider reducing several taxes that have been applied to the stock market shares.
The Special Advisor told that government will consider withdrawing the super tax and/or tax on bonus shares considering the reduced inflation and improved revenue condition. However, he told that no subsidies will be provided apart from the power tariff differential.
No More Loans, For Now
Miftah added that no more loans will be raised through bonds from the international market for the remaining period of the current budget year. The reason behind this is the high-interest rate on these bonds.
He further added that tax on imports of several items that was introduced back in October 2017 will be reversed in the coming budget. He added that Pakistan can reduce the trade deficit to 5% of GDP if provinces generate extra 0.5% revenue.
Talking about giving relief to the stock market, Miftah said;
We will very seriously and closely consider their request to abolish tax on bonus shares.
He didn’t add anything about specific budget allocation for the stock market. He further showed his favor towards the capital gains tax as it targets the rich only. Miftah was of the view that capital gains tax should be added to the stock market as well, however, the holding period for such property will be reviewed.
Miftah was positive that FBR’s target of collecting Rs 4 trillion during the current fiscal year will be met successfully.
The government imposed the super tax to finance the operation Zarb-e-Azab back when it started. Mr. Ismail hinted that this tax might also be abolished if the expenses of the operation are met without it. The General Sales tax of 17%, however, will remain unchanged.
He mentioned privatization of Mari Petroleum Company Limited and SME Bank will be completed in the current fiscal year as well. The tax amnesty scheme will also be announced before the budget, Miftah Ismail said.