Pakistan’s Punjab province waives stamp duty on court-ordered transfers, mergers

Pakistan’s Punjab province has fully waived stamp duty on property transfers arising from mergers and schemes of arrangement approved by courts or the Securities and Exchange Commission of Pakistan (SECP).

The government of Punjab has issued a notification in accordance with the provisions of the Companies Act, 2017, following a judgment of the Lahore High Court – the province’s top court.

The judgment, delivered by Justice Jawad Hassan and Justice Malik Javid Iqbal Wains, examined whether the Punjab government could levy stamp duty on merger schemes sanctioned by the Courts or the SECP.

During the proceedings, the SECP informed the court that under Section 282(5) of the Companies Act, 2017, companies with registered offices in Islamabad are exempt from stamp duty on property transfers arising from mergers or schemes of arrangement approved by the Court or the SECP.

However, this provision applies only in provinces after notification or legislation by the respective provincial governments.

The court directed the chief secretary of Punjab and the SECP to consult on the matter.

Following a series of meetings and deliberations, the government issued the notification granting exemption from stamp duty on property transfers arising from mergers or schemes of arrangement approved by the Court or the SECP.

As company law is a federal subject while stamp duty falls within provincial jurisdiction, this overlap created practical difficulties for companies undertaking restructuring and mergers in Punjab.

The exemption is expected to facilitate such transactions, reduce costs, and support corporate restructuring, investment, and business growth in the province.

The SECP has welcomed the government’s decision, terming it a positive step toward facilitating the corporate sector.