Govt mulls taxing bonus shares, undistributed profits | The Express Tribune
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ISLAMABAD: The Federal Board of Revenue (FBR) has recommended the imposition of a 5% tax on bonus shares issued by companies and on their undistributed profits in the next budget. This proposal would primarily affect family-owned companies but would benefit minority shareholders. Sources told The Express Tribune that the FBR is contemplating the reinstatement of two old tax measures that were previously dropped for various reasons. These measures involve levying a 5% income tax on bonus shares issued by companies instead of paying dividends to shareholders. If approved by the finance minister and later by the prime minister, the bonus tax proposal would provide a dual benefit to the tax authorities. If companies pay dividends, the FBR would receive a 15% tax, and if companies opt to issue bonus shares, the FBR would still collect a 5% tax. Finance Minister Ishaq Dar will begin reviewing and either accepting or rejecting taxation proposals soon, as the budget announceme