The National Clearing Company of Pakistan Limited (NCCPL) has issued a detailed circular to clarify the revised tax regime for capital markets, as introduced by the Finance Act, 2025. The new framework, effective from July 1, 2025, brings significant amendments to Capital Gains Tax (CGT) rates for transactions on the Pakistan Stock Exchange (PSX), Pakistan Mercantile Exchange (PMEX), and mutual funds, along with a new super tax structure.
The NCCPL circular highlights that the new tax rates are dependent on the acquisition date and holding period of securities and are different for investors who are on the Active Taxpayers List (ATL) versus those who are not.
Capital Gains Tax (CGT) on PSX Transactions
The tax rates for the PSX have been structured to incentivize long-term investment. While some historical rates remain in place for securities acquired before July 1, 2025, a new flat rate of 15% has been introduced for all investors (ATL and non-ATL) on securities acquired on or after July 1, 2025.
For holdings acquired between July 1, 2022, and June 30, 2024, the rates are progressive, decreasing from 12.5% for holding periods of 1-2 years to 0% for periods of more than 6 years for ATL investors. A similar progressive reduction is applicable for non-ATL investors, albeit at higher initial rates.
CGT on PMEX and Mutual Funds
On the Pakistan Mercantile Exchange (PMEX), a uniform rate of 5% has been set for all investors (ATL and non-ATL) on securities acquired on or after July 1, 2025. This simplifies the tax treatment for commodity market participants.
For mutual funds, the tax rates also vary. Stock funds now have a flat 15% CGT rate for all investors on securities acquired from July 1, 2025. Other funds have a 15% rate for individuals and AOPs, and a 25% rate for companies. These uniform rates are a key change from the previous regime which had a significant disparity between ATL and non-ATL investors.
New Super Tax on Capital Gains
A significant addition to the tax structure is a new Super Tax, which will be computed and collected by the NCCPL for the tax year 2026. This tax is applicable on capital gains from all markets, regardless of the individual CGT rates.
The Super Tax is a tiered structure based on income range, starting from 0% for capital gains up to PKR 150 million and progressively increasing to 10% for gains exceeding PKR 500 million. This tiered approach is designed to enhance government revenue without placing an undue burden on smaller investors.
The NCCPL has urged all market participants to review the new framework to ensure full compliance. These changes are part of the government’s broader strategy to formalize the economy, encourage long-term market participation, and create a more equitable and transparent tax environment.
