Karachi June 7 2024: The Pakistan Stock Exchange experienced a nearly 2.5 percent decline at its opening, attributed to concerns regarding potential changes in tax rates for Capital Gains and Dividend income, aimed at meeting the IMF requirement of generating additional revenues of PKR 2 trillion.
At 9:57 AM, the KSE 100 index saw a decrease of 2.47 percent, equivalent to a drop of 1,822 points.
With a strong likelihood of setting the annual tax collection target at over 10 percent of GDP for the upcoming budget—amounting to PKR 12.9 trillion—the government will need to implement significant revenue measures on GST, Income Tax, as well as additional customs and excise duties to achieve this goal.
The IMF has proposed bringing several dozen items under the standard rate of General Sales Tax, encompassing unprocessed food, stationery items, medicines, POL products, and others. If all IMF recommendations are implemented in the next budget, it could potentially contribute an additional PKR 1.6 trillion to the national revenue.
Income tax on capital market instruments and capital gains tax will likely be equalized to standard personal income tax or corporate tax apart from increasing rates of personal income tax with introduction of one more slab.
