Tag: Capital Market

  • Budget 2024-25: Pakistan Stock Exchange proposes tax reforms for economic growth

    Budget 2024-25: Pakistan Stock Exchange proposes tax reforms for economic growth

    Pakistan Stock Exchange (PSX) has forwarded a series of significant tax proposals to both the Ministry of Finance (MoF) and the Federal Board of Revenue (FBR) for potential inclusion in the upcoming federal budget for the fiscal year 2024-25.

    These proposed measures are designed to not only bolster revenue but also to incentivise the allocation of resources towards sectors of the economy that are both productive and officially documented. This move is deemed critical for fostering economic growth and generating employment opportunities across Pakistan.

    Notably, PSX has experienced a marked upswing in its performance, largely attributed to recent stability measures implemented within the broader macroeconomic landscape. In the outgoing year alone, the market capitalisation has surged by nearly Rs4 trillion, signifying a substantial boost to economic prosperity.

    Furthermore, foreign investments totaling approximately $132 million have flowed into the country through the stock market since July 2023, underscoring the significance of the stock market in attracting foreign capital.

    It is imperative that both the Ministry of Finance and the FBR carefully evaluate the proposals put forth by PSX to ensure that the stock market remains a vital contributor to economic growth, tax revenues, foreign investment inflows, and the formalisation of the economy. This strategic move is crucial for sustaining the positive momentum witnessed in both the capital market and broader economic recovery efforts.

    PSX stresses the importance of prioritising comprehensive documentation of all economic activities, with capital markets representing one of the most meticulously documented sectors within the economy. A robust capital market ecosystem not only aligns with key economic and social objectives but also serves as a catalyst for expanding the taxpayer base, augmenting savings and investment rates, and mitigating wealth disparities.

    To realise these overarching objectives, investors necessitate a conducive and predictable tax regime. As such, Pakistan Stock Exchange has articulated a range of proposals to the Ministry of Finance and the Federal Board of Revenue, all aimed at fostering a favorable environment for investment and economic growth in the fiscal year 2024-25.

  • Finance Minister envisions Pakistan’s economy soaring to $2 trillion by 2047 

    Finance Minister envisions Pakistan’s economy soaring to $2 trillion by 2047 

    Dr Shamshad Akhtar, the Caretaker Finance Minister, emphasised Pakistan’s significant economic potential, stating that the country could achieve a $2 trillion economy by 2047, as per a World Bank report.  

    Addressing the Future Summit in Karachi, she underscored the importance of adopting robust economic and sector-specific policies, coupled with a resolute commitment to implementing challenging structural reforms. 

    Dr Akhtar highlighted the need for increased innovation and diversification within the economic framework to ensure sustainable growth.  

    Emphasising the role of Development Finance Institutions (DFIs), she noted that institutions with expertise, efficiency, and flexibility could serve as crucial drivers for the growth and development of the capital market. 

    In a recent meeting with the Chairman of the Securities and Exchange Commission of Pakistan (SECP) and heads of DFIs, Dr Akhtar discussed the progress of establishing a private equity and venture capital (PE and VC) fund.  

    While the DFIs reaffirmed their commitment, they also provided insights into the progress made and challenges encountered in the process. 

    Notably, Pakistan, currently under a caretaker government, successfully reached a staff-level agreement with the International Monetary Fund on the first review of a short-term bailout program.  

    This agreement clears the path for unlocking $700 million, a crucial step in mitigating the looming economic crisis.  

    The caretaker government has implemented various fiscal measures, including an increase in the petrol levy, additional taxes, and significant reforms in the power sector, to address the economic challenges effectively.