Budget proposals of the SECP focus on encouraging investments in stock market, promoting corporatisation and encouraging listing of new companies.
The proposals primarily talked about the documentation of economy, competitiveness of Pakistan corporate sector, increase in government tax revenue, growth of corporate sector and changes in tax regime to facilitate investors.
"As much as favourable tax treatment, investors need a stable and predictable tax environment in stock market", sources said. When making a long-term investment decision, they need to know what tax treatment their investment will receive over the term of their investment horizon.
Otherwise, they may simply decide not to invest or adopt short-term trading strategies. The government must consider adopting long-term measures to promote savings and investment and development of the capital market, sources said.
While presenting the proposals, the SECP chair highlighted key issues and challenges being faced by the SECP-regulated sectors due to prevailing taxation regime.
He emphasized that growth and development of the formal economy was largely dependent on providing a level-playing field, where individuals and businesses were encouraged to participate through regulated and documented sectors of the economy.
The chairperson FBR, while discussing the proposals agreed that documentation of the economy was a key priority of the government.
Development of the formal economy through fiscal incentives and removal of taxation anomalies could ultimately increase the country's overall revenue generation capacity.
It was agreed that the SECP and the FBR would meet again, within a fortnight, to take the discussions forward.