Federal government takes important decision over prize bonds worth $7 billion in Pakistani market
The government has decided to register prize bonds of all denominations worth US$7 billion as a policy decision after expiry of registration date for Rs 40,000 Prize Bonds (Bearer) on March 31, 2020.
Senior officials at the Ministry of Finance told ProPakistani that the government has set a tentative timeline of end-December 2020 for the registration of all prize bonds having different denominations.
This means that when all other prize bonds are registered with the government, the holders of the bonds have to declare his/her computerized national identity card number (CNIC) to the government. Thus, only holders of the registered bonds would be valid for participating in draws and encashments etc.
The withholding tax (15 percent) would be deducted on the winning prize bonds and required to be disclosed in the annual income tax return filer of the winner. Moreover, the trading of such prize bonds in the open markets would not be possible after registration of all prize bonds.
Senior officials at the Ministry of Finance told ProPakistani that the Finance Division has decided to convert all bearer prize bonds into the registered instruments through biometric identity verification and the Securities and Exchange Commission of Pakistan (SECP) has already issued a notification on the establishment of the secured transactions collateral registry to enhance SME access to finance.
The registration of all kinds of prize bonds is mainly the responsibility of the Central Directorate of National Savings (CDNS).
They said that the registration of prize bonds is important for improving integrity of the financial sector and establishment of the secured transactions registry will help increase credit to SMEs through securitization of moveable property.