KARACHI: Pakistan has ordered a comprehensive review of capital-market taxation and incentives in a bid to attract more companies to list and deepen market-based financing, Finance Minister Muhammad Aurangzeb said on Friday after chairing the inaugural meeting of the government’s Capital Market Development Council (CMDC).
The move comes as Pakistan’s capital markets remain small relative to the size of its over $370 billion economy, with most corporate borrowing dependent on banks and a limited number of listed firms providing narrow liquidity. For years, investors and issuers have complained that complex taxes, inconsistent incentives and regulatory hurdles have discouraged new listings and kept retail participation low.
The reforms are also tied to Pakistan’s broader economic restructuring under IMF-supported commitments, which require shifting from a bank-led credit system to a more diversified financing environment that can channel savings into productive investment and help stabilize long-term growth.
“Our priority is to develop a modern, integrated, and investor-friendly capital market ecosystem, and taxation remains a key factor affecting capital-market attractiveness,” Aurangzeb told the meeting accordiing to a statement released by the finance ministry.
