Karachi: Recent amendments in the Income Tax Ordinance, 2001, under the Finance Act 2025, have introduced new capital gains tax rates pertinent to the Pakistan Stock Exchange (PSX), Pakistan Mercantile Exchange (PMEX), and Mutual Funds Association of Pakistan (MUFAP). These changes are applicable from July 1, 2025, and are expected to impact market participants significantly.

The National Clearing Company of Pakistan Limited released a notice on August 5, 2025, detailing these amendments. For securities acquired before July 1, 2013, a 0% tax rate remains applicable, providing relief to longstanding investors. However, securities acquired after this date are subject to varying tax rates based on the acquisition period and holding duration. Notably, securities acquired on or after July 1, 2025, will be subjected to a flat rate of 15% for both investors appearing in the Active Taxpayer List (ATL) and those not listed.

According to information available from the Pakistan Stock Exchange (PSX), securities acquired between July 1, 2022, and June 30, 2024, will incur regressive tax rates based on holding periods ranging from one to over six years. The tax rates for these periods range from 12.5% to 0% for ATL investors and 25% to 0% for non-ATL investors, depending on the holding duration.

Similarly, for the PMEX, securities acquired on or before June 30, 2025, will be taxed at 5% for ATL investors and 10% for non-ATL investors. For those acquired on or after July 1, 2025, a uniform tax rate of 5% applies to both categories of investors.

In the MUFAP, stock funds and other fund categories see a consistent tax rate of 15% for securities acquired on or after July 1, 2025, across individuals, associations of persons, and companies. Meanwhile, companies acquiring other fund securities before this date face a 25% tax rate if listed in ATL and 50% if not.

Additionally, a revised Super Tax on capital gains has been introduced, calculated under Section 4C. The super tax rates increase progressively, beginning at 1% for incomes exceeding 150 million and reaching 10% for incomes surpassing 500 million.

These measures reflect a strategic approach by the authorities to streamline tax collection while incentivizing longer holding periods for market participants.