Targeting long-term investment: SBP simplifies tax regime for non-residents

The State Bank of Pakistan (SBP) announced on Thursday to simplify tax regime for non-residents to encourage investment in long-term debt securities.

Amendments in the Income Tax Ordinance, 2001 have been issued to simplify the tax regime for nonresident companies investing in debt instruments and Government securities, said the central bank in a statement.

“These amendments aim to deepen our capital markets, support availability of long term rupee financing sources, support competition in the local currency debt market, and diversify the source of funding for the government,” said SBP.

Giving the rationale behind the amendments, SBP said that the existing foreign exchange framework allows non-residents to invest in debt instruments and Government securities through Special Convertible Rupee Account (SCRA) maintained with banks in Pakistan.