Bourses offer collection of FED

ISLAMABAD - Stock Exchanges have offered the government to collect the 16 per cent Federal Excise Duty (FED) imposed in the budget 2009-10 through the clearing house system, besides requesting to declare it as final tax liability on brokers.
A delegation of the Karachi Stock Exchange (KSE) called on Prime Ministers Advisor on Finance Shaukat Tarin to deliberate on the modalities of the latest mechanism for bourses related taxation.
Sources privy to the meeting told TheNation that the KSE delegation had offered installation of the FED in the computerised clearing and settlement system. This would ensure collection of the duty on behalf of the Federal Board of Revenue (FBR) without involvement of a human hand and cost to the government.
The government has accepted the offer of the countrys mother bourse and asked them to come back with a comprehensive and final mechanism proposal for collection of FED by the management of respective stock exchange on daily basis. The KSE management would also prepare a proposal for making FED and existing Withholding Tax on stock exchanges into one presumptive tax and final liability.
The Capital Value Tax on each transaction would go with the imposition of the FED while the government has declined to withdraw Withholding Tax this year. The government has hinted at withdrawal of the Withholding Tax next year, the sources added.
The KSE delegation included Chairman Kamran Y Mirza, and Directors namely Dr Farid Khan, Khalid Ahmed Sherwani, Muhammad Yasin Lakhani, Zafar S Moti, Haji Ghani, Haji Osman and Amin Yusuf. According to the sources, the meeting was the exclusive initiative of the KSE and there was no representative of Lahore and Islamabad Stock Exchanges.
From the government side, Secretary Finance Salman Siddiqi, Chairman FBR Sohail Ahmed, Member Sales Tax Zafar Majid also attended the meeting.