Islamabad: Ahead of the highly anticipated federal budget announcement on June 10, Pakistan’s stockbrokers are urging the government to introduce tax-free investment accounts. The move is aimed at pulling household savings out of idle assets like gold and real estate, and injecting them directly into the formal economy.
The Pakistan Stock Brokers Association (PSBA) has formally proposed the creation of an “Investment Saving Account,” similar to models successfully used in the US, UK, and Japan. Under this scheme, everyday citizens would be allowed to invest in the Pakistan Stock Exchange (PSX) while enjoying significant tax exemptions on capital gains and dividend income up to a specific limit.
đź”´ Ambitious Goals for the PSX
Currently, the PSX has roughly 565,000 registered investors. By offering tax incentives, the PSBA hopes to aggressively expand this base to 2.5 million investors within the next two years.
Alongside the tax-free accounts, the association is pushing for a reduction in the Capital Gains Tax (CGT) for long-term investors. Brokers argue that the current system penalizes long-term stock holdings while giving unfair tax breaks to the real estate sector.
DuniKa Times Takeaway: If the government approves these tax-free accounts in the upcoming budget, it could trigger a massive influx of new retail investors into the PSX, providing much-needed capital to local industries.