SECP clarifies CGT relaxation will not allow investors to whiten black money – Alfalah Securities Limited

Karachi: The Securities and Exchange Commission of Pakistan (SECP) while addressing major concerns of investors, has clarified that the relaxation given on the Capital Gain Tax (CGT) regime would not allow investors to whiten their black money by investing in the stock market due to stringent policies and due diligence requirements of knowing your customers are being followed in the stock exchange.

According to Alfalah Securities Limited, although the investors would be exempt from explaining the source of investment under section 111 of the Income Tax Ordinance, 2001 till June 30, 2014, the provisions of the laws of the National Accountability Bureau (NAB), Anti-Narcotics Force (ANF), Federal Investigation Agency and other national institutions would continue to apply regarding the source of investment to prevent cases of money laundering and financing terrorism. Alfalah Securities Limited believes the clarification of SECP on the new CGT regime would reduce the ambiguity of investors in this regard where Alfalah Securities Limited also expects the FBR would issue the SRO on the CGT mechanism by the end of February 2012.