Karachi February 24 2023: Pakistan finance ministry removed capital gain tax on Government debt instruments in order to attract foreign direct investment in debt instruments.
Foreign Investors have pulled net amount of USD 726 million from Pakistan debt securities including T-bill and PIB’s since July 2021, according to central bank data.
During the first seven months of fiscal year 2023, foreign investors have bought USD 18 million worth of T-bills while sold USD 59.23 million worth of bills, according to the data provided by State Bank of Pakistan. In fiscal year 2022, foreigners sold T-bill and PIB worth of USD 1,034 million and bought T-bill and PIB worth of USD 349 million with net outflow of USD 685 million in debt securities.
According to the issued notification the Federal Government is pleased to direct that the following further amendment shall be made in the Seventh Schedule, namely: —In the aforesaid Schedule, in rule 8, after sub-rule (3), the following new sub-rule shall be added, namely: -“(4) Profit on debt and capital gains from debt and debt instruments approved by the Federal Government shall be exempt from tax chargeable under this Ordinance, derived by any non-resident banking company approved by the Federal Government for the purpose of this sub-rule.”.
