Stock brokers welcome budget as government avoids new taxes on market

The Pakistan Stock Brokers Association (PSBA) on Monday welcomed the federal budget for fiscal year 2026-27, saying the government's decision not to impose new taxes on the stock market was a positive signal for investors and would help strengthen confidence in Pakistan's capital markets.

In a statement, the association said the absence of fresh taxes indicated that the government was avoiding additional financial burdens on existing investors at a time when market participants had been concerned about the possibility of new fiscal measures targeting the sector.

The PSBA said maintaining the current tax regime was one of its key recommendations during the budget consultation process, arguing that a stable and predictable taxation framework is essential to encouraging long-term investment.

"The absence of any new taxes effectively dispels widespread market rumors and concerns regarding additional fiscal burdens on investors," the association said.

According to the PSBA, policy continuity sends a strong positive signal to both domestic and foreign investors, reinforces market stability and encourages broader participation in the stock market.

The association also said several budget measures were expected to benefit listed companies and improve corporate earnings. These include support for the textile sector, a three-year extension of the final tax regime for information technology and IT-enabled services exports, incentives for the pharmaceutical industry, relief for the construction and energy sectors, infrastructure spending, and a reduction in the super tax burden on parts of the corporate sector.

It said stronger business performance would ultimately support the growth of the capital market, which plays a key role in mobilizing investment and promoting economic growth.

The PSBA also thanked the government, the Senate Standing Committee on Finance and Revenue, the Ministry of Finance, the Tax Policy Office and the Federal Board of Revenue for engaging with stakeholders during the budget-making process.

The association said investors were looking for continued policy consistency and reforms aimed at increasing market participation, improving economic documentation and enhancing market depth.