History shows CGT hikes don’t scare investors: Report

News Image

By MG News | June 06, 2024 at 04:12 PM GMT+05:00

0:00

June 06, 2024 (MLN): Pakistan stock market has plummeted 2.3%, or 1,764 points, over the past seven sessions amidst fears of an increase in Capital Gains Tax (CGT) or dividend tax. However, an analysis of past budget changes in CGT and dividend taxes indicates that market reactions to these changes have generally been insignificant.

According to a report by Topline Securities, PSX lost just 0.61% ten days post-budget announcement in fiscal year 2014-15.

To note, in FY15, the CGT rate was increased by 250bps to 12.5% from 10% for holding up to 12 months. Holding between 12- 24 months was taxed at 10%, and holding beyond 24 months was exempted.

The analysis further shows that PSX gained 1.5% ten days post-budget in fiscal year 2015-16. CGT was increased by 250bps to 15.0% for holding up to 12 months, 12.5% for holding between 12-24 months, 7.5% for holding between 2-4 years, and exempted holding above 4 years.

Moreover, in FY16, the dividend tax was increased by 250bps to 12.5%.

On the other hand, in the fiscal year 2017-18, market declined 6% post announcement of budget as this coincided with MSCI reclassification from frontier to emerging markets resulting in net outflow of $133 million in the months of May and Jun 2017 (budget announced on Jun 09, 2017). 

Copyright Mettis Link News

Related News

Name Price/Vol %Chg/NChg
KSE100 132,576.99
161.03M
-0.62%
-826.20
ALLSHR 82,983.68
903.36M
-0.25%
-204.38
KSE30 40,358.80
56.86M
-0.72%
-292.66
KMI30 190,727.32
67.92M
-0.71%
-1356.60
KMIALLSHR 55,698.48
457.08M
-0.27%
-149.22
BKTi 36,242.06
11.15M
-0.50%
-180.82
OGTi 28,323.42
10.71M
-0.40%
-114.19
Symbol Bid/Ask High/Low
Name Last High/Low Chg/%Chg
BITCOIN FUTURES 110,120.00 110,265.00
108,625.00
905.00
0.83%
BRENT CRUDE 70.12 70.71
69.61
-0.03
-0.04%
RICHARDS BAY COAL MONTHLY 97.50 0.00
0.00
1.45
1.51%
ROTTERDAM COAL MONTHLY 108.00 109.00
107.95
0.90
0.84%
USD RBD PALM OLEIN 998.50 998.50
998.50
0.00
0.00%
CRUDE OIL - WTI 68.30 68.94
67.70
-0.03
-0.04%
SUGAR #11 WORLD 16.54 16.61
16.08
0.41
2.54%

Chart of the Day


Latest News
July 09, 2025 at 11:58 PM GMT+05:00

Auction Result: Govt raises Rs1.5tr through T-bills


July 09, 2025 at 05:27 PM GMT+05:00

Gold price in Pakistan falls Rs3,000 per tola


July 09, 2025 at 05:26 PM GMT+05:00

UBL crowned top performing Primary Dealer in FY25


July 09, 2025 at 05:11 PM GMT+05:00

SECP approves name change for Secure Logistics



Top 5 things to watch in this week

Pakistan Stock Movers
Name Last Chg/%Chg
Name Last Chg/%Chg