Karachi  -  Pakistani stocks continued their slide on Wednesday falling by 4.4 per cent on reports of new taxes amid continued political and economic uncertainties, dealers said.

The benchmark KSE-100 Index fell by 567 points to close at 12,254 points against Tuesday's close at 12,822.

Traders expect imposition of capital gains tax and other levies on stock trades in the upcoming budget for 2008-09, to be presented in parliament on June 7, to boost dwindling government revenues.

"Any imposition of taxes will hit our market volumes and trading," said Zafar Moti, chief executive of Zafar Moti Capital Securities.

Moti said investors in the market might switch to parallel tax-free markets such as Dubai if the government imposed more levies on stock trading.

Pakistan is facing one of its worst economic crises in eight years due to rising international oil prices, increasing imports and slow domestic economic growth.

"We have one of the lowest tax-to-gross-domestic-product ratios in South Asia," said economist Shaukat Siddiqui.

The government is expected to see a shortfall of around 20 per cent in its revenue collection for fiscal 2007-08 that ends in June.

Pakistan's political upheaval is also worsening due to tussles between the country's embattled President Pervez Musharraf and the two main political parties in the parliament, including the majority Pakistan People's Party of slain former premier Benazir Bhutto.

There have been reports that the two parties, which also include former premier Nawaz Sharif's faction of Pakistan Muslim League, will seek impeachment of Musharraf for violating the constitution. (dpa)