CGT 15% for Filer, Non-Filer: Leveling Field or Losing Plot?

August 7, 2025 (MLN): In a policy twist that has caught investors off guard, the capital gains tax (CGT) regime for Tax Year 2026 now offers no tax advantage to those appearing on the Active Taxpayers List (ATL) for securities acquired on or after July 1, 2025.

Whether you are a compliant filer or a habitual non-filer, the tax rate stands flat at 15%, that effectively erodes the incentive to become a filer.

For years, Pakistan’s CGT structure has leaned heavily on differential tax treatment to push citizens toward formal tax compliance. Filers, those listed on ATL, were rewarded with significantly lower CGT rates, often half or even less than those imposed on non-filers.

That wedge has now been removed, at least for new investments.

Capital Gains Tax Rates (Tax Year 2026)

15% CGT rate for Filers, Non-filers

A fundamental question has raised with the introduction of a flat 15% CGT rate on securities acquired from July 1, 2025 onwards”

“If the tax burden is identical, why should anyone go through the hassle of filing returns and staying on the ATL?”

This concern is resonating throughout brokerage circles and investor communities. Many fear this may dampen the government’s decade-long effort to increase documentation and compliance in Pakistan’s informal economy.

Till last year, non-filers were paying double the CGT compared to their compliant counterparts.

 For example, shares held for more than two years but less than three were taxed at 10% for ATL filers and 20% for non-filers. This punitive gap was designed as a stick to push non-compliant investors into the tax net.

But from July 1, 2025, that stick disappears.

May be, this parity in CGT rates may be temporary or an oversight. If it's intentional, it signals a policy shift away from tax-filer incentives, which could reduce motivation for voluntary compliance.

For investors, the message is confusing as you are telling people to file their taxes to save on capital gains, but then you offer no difference in rates. That ultimately kills the purpose.

Pakistan’s capital markets have long struggled with low investor participation and weak confidence in tax fairness. The ATL system was one of the few nudges encouraging documentation.

Now, with the CGT rate equalized at 15% for both filers and non-filers on future acquisitions, the narrative of ‘benefits for filers’ is losing credibility.

This could lead to broader questions:

Will salaried individuals and small investors continue to file returns?

Could this policy reduce the effectiveness of ATL as a compliance tool?

Or is a broader simplification of the tax code on the horizon?

Pakistan’s capital markets thrive on clarity, consistency, and confidence. By eliminating the CGT advantage for filers on new investments, the FBR may have unintentionally cast doubt on all three.

Unless rectified or clarified, this policy could backfire, discouraging tax compliance, rather than reinforcing it.

If there’s no benefit, there’s no motivation.