Staff Reporter Karachi
Pakistan Stock Exchange (PSX) has presented important budgetary proposals for 2021-22 to boost economic growth and address key structural imbalances in Pakistan’s economy.
The stock market is one of the most documented sectors of the economy. All capital market participants are fully documented; hence developing the capital markets is fully aligned with FBR’s efforts to increase the tax base in Pakistan.
An efficient, equitable and broad-based tax system and a culture of corporatization are interdependent.
In addition, a broad based capital market helps to achieve important economic and social objectives like increasing the number of tax payers, improving savings and investment rates, and reducing wealth inequality.
Fiscal discipline and tax measures have a direct and profound impact on the structure and functioning of the capital markets.
A large and well-functioning capital market is a prerequisite for a modern economy.
Hence, it is imperative for the growth of Pakistan’s economy to create a conducive environment which will help to attract more companies and investors to the capital markets.
The core principle of the 14 proposals presented by PSX is to increase the size and depth of the capital market by incentivizing new listings and increasing the investor base, without impacting government revenues.
All the proposals essentially focus on impediments and disincentives that are negatively impacting the development of the capital market, as well as the documented corporate sector.
The recommendations are primarily designed to remove the disincentives, and the incidence of double, and at times multiple, taxation that are penalizing capital formation.