FM backs stock tax break to fuel privatization push

June 11, 2025 (MLN): Pakistan’s Finance Minister Senator Muhammad Aurangzeb has defended the government’s decision to tax mutual fund income at 25% while keeping stock market income taxed at a lower 15%, saying the capital markets need to be incentivised for long-term economic growth.

Speaking to a private news channel, he said, “The capital sector must be encouraged. The stock market offers safe dividend-based investments, especially for those looking for fixed-income-like returns.”

He emphasised the critical role the Pakistan Stock Exchange (PSX) plays in economic development, noting its strategic importance in the government’s privatisation agenda.

“Today, I spoke about privatisation, outright sales, strategic buyers, but if we want to include the public in this process, a portion of these assets must be offloaded on the stock exchange,” he added.

“This sends a clear signal: we want people to invest through formal capital market channels,” he added.

Pakistan’s FY26 budget, presented yesterday, outlined a Rs17.6 trillion outlay with a focus on expanding the tax base and attracting investment.

The preferential tax treatment for listed securities is being viewed as part of broader efforts to deepen capital markets and promote public ownership in key sectors.

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