Finance Minister Stresses Tax Reform as Key to Capital Market Growth at Inaugural CMDC Meeting

Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, has underscored the need for comprehensive tax reform to boost the attractiveness of Pakistan’s capital markets. Chairing the inaugural meeting of the Capital Market Development Council (CMDC) in Islamabad, the minister directed the Tax Policy Office, State Bank of Pakistan (SBP), Securities and Exchange Commission of Pakistan (SECP), Debt Management Office (DMO), and the Finance Division to work together on reviewing capital market taxation, issuer-side tax incentives, and measures to encourage wider listings and greater transparency. “Taxation remains a key factor affecting capital market attractiveness,” the minister said, emphasizing that reforms should reward compliant and transparent companies rather than penalize them. He called for a joint review of tax policies to support product development and market competitiveness. The meeting brought together senior officials from the SECP, SBP, Pakistan Banks Association, Pakistan Stock Exchange, Central Depository Company, National Clearing Company, Pakistan Business Council, and the Finance Division. “Developing a modern, integrated, and investor-friendly capital market ecosystem is a key national priority, essential for improving access to finance, promoting savings, deepening market activity, and strengthening Pakistan’s long-term economic resilience,” said the Finance Minister. Participants reviewed the roadmap for strengthening and expanding Pakistan’s capital markets, with a focus on adopting global best practices and creating a more inclusive, high-liquidity market ecosystem. Discussions centered on enhancing retail and institutional investor participation, developing diversified investment products, improving facilitation for intermediaries, and creating incentives for both investors and issuers. The council also examined requirements for cross-border integration, regulatory modernization, and the need to incentivize companies to raise funds through both debt and equity markets. The Finance Minister highlighted the government’s commitment to building vibrant and well-functioning capital markets capable of supporting economic growth. He noted that ongoing structural reforms are already contributing to stronger market performance and urged both the public and private sectors to make fuller use of the debt capital market. It was agreed that dedicated working groups would be established to prepare key performance indicators and action plans within two weeks, with quarterly progress reports to monitor implementation. The council will meet at least once each quarter to review outcomes.