Karachi: The Federal Board of Revenue (FBR) is seeking to track the source of investments in the capital markets in order to broaden the tax base of the country.
According to Alfalah Securities Limited, the national exchequer would conduct a comprehensive audit surveillance of brokerage houses and would inquire about the source of investments being made through them, followed by the filing of income tax returns.
Members of the stock exchange on the other hand, have been protesting that the imposition of Capital Gain Tax (CGT) aimed at levying investors and increasing the tax base has significantly reduced the flow of investments towards the stock exchanges while, the FBR has failed to realize the severity of issues being faced by these members.
FBR would start a preliminary audit of brokerage houses from November 21, 2011 and cases would be selected further to investigate the details of investors submitted by the stock exchange members. Alfalah Securities Limited expects the audit being conducted by FBR would result negatively for market volumes as the investors would shy away from the capital markets of the country which would ultimately lead to closure of several brokerage houses.