New Tax Regimen - Govt discouraging Interest income and Real Estate Investment

[ps3linux]

Sir, these look fine to me. This is geared to long term investments and taxes those who are in for quick in and out (short term) gains.

In UK a person has to hold the house minimum 2 years for personal use to be exempt from Capital Gains Tax. Even rented properties need to be brought back in for personal only use for 2 years.

Sole trader property Investors can pay up to 40% CGT on investment property, depending on what income tax bracket they fall under.

A few years back under new legislation now a sole trader property investor can't even deduct interest expense! But this exemption has now been given to Limited Companies so people are forced to pay higher taxes or operate their businesses differently for lower taxes. Limited company have annual filing so HMRC has a better visibility.

New rules in Pakistan are about changing the dynamics of investments to stop volatility in the markets. Investors will adopt sooner rather than later.

Actually few things

1) long term investment encouraged (Equities and mutual funds) one goes into the documented economy the other also into documented economy but a pass-through vehicle.
2) discouraging deposits/national savings etc the tax rate will go as high as 70% on profits bit extreme but Ok otherwise
3) discouraging rampant real estate investment, rather the only investment people understood here
4) When investment opportunities are curtailed people opt for slightly higher risk avenues like business and industry that's what one of the intent is.

Haven't re-acquainted myself with UK tax system for a while, earlier it used to differ from US tax on real estate, but what you are telling the new one seems pretty much inline with US Tax system.