Business Recorder
Federal Minister for Finance Muhammad Aurangzeb held separate consultative meetings with delegations from the Insurance Association of Pakistan (IAP) and the Mutual Funds Association of Pakistan (MUFAP) on Monday as part of pre-budget discussions for FY2026–27, focusing on taxation, savings mobilisation, and regulatory reforms aimed at strengthening Pakistan’s financial sector. During his meeting with the IAP, led by Chairman IAP Shoaib Javed Hussain, the minister welcomed the delegation and appreciated the engagement of the insurance industry in contributing to the budget consultation process, read an official statement. He emphasised the need for sustained dialogue with key sectors to ensure that policy measures remain aligned with economic priorities and contribute to long-term financial stability and growth. The delegation presented a set of proposals focusing primarily on taxation and regulatory considerations with respect to the insurance sector. Participants discussed various aspects of the existing taxation framework, including the interaction between federal and provincial levies, and their implications for the sector. The need for consistency, coherence, and predictability in the overall tax structure was highlighted in the context of facilitating sectoral development. Discussions also covered the need to ensure clarity in the application of sector-specific laws governing insurance, particularly in relation to the broader taxation framework. The delegation underscored the importance of ensuring that existing legal and regulatory principles remain appropriately aligned with evolving policy and accounting standards. Govt eyes insurance sector to diversify lending sources: Aurangzeb The delegation further proposed measures aimed at promoting savings and expanding insurance penetration, including the possible restoration of tax incentives for policyholders. Facilitating long-term savings instruments and encouraging wider participation, particularly among salaried individuals, were identified as key areas for consideration. Participants also shared views on strengthening the role of the insurance sector in financial sector development, including through improved alignment of investment frameworks and long-term financial instruments. Continued interaction with regulators and policymakers on sector-specific issues was highlighted as essential. Aurangzeb acknowledged the proposals presented by the delegation and noted that these would be carefully reviewed in the context of the upcoming budget. He reiterated the Government’s commitment to advancing the development of the financial sector, while maintaining a balanced and sustainable approach to fiscal policy. Aurangzeb held a separate meeting with a delegation of the Mutual Funds Association of Pakistan (MUFAP), led by Shahzad Dada, Chairman of MUFAP, to discuss matters relating to the mutual fund industry and its role in the context of the Federal Budget 2026–27. Finance minister engages business leaders to shape budget priorities, boost growth Welcoming the delegation, the finance minister appreciated the continued engagement of the asset management industry in supporting policy dialogue. He acknowledged the significant role of the mutual fund sector in mobilising savings, strengthening financial intermediation, and contributing to the development of Pakistan’s capital markets. As per a statement, the discussion focused on the broader savings landscape and the need to further enhance the efficiency and depth of financial instruments available to investors. Participants highlighted the need to reinforce institutional mechanisms that facilitate savings mobilisation, while ensuring that policy measures remain aligned with long-term financial sector objectives. The meeting covered matters relating to the mutual fund industry, including views on the budget framework and the need for regulatory improvements to support sector growth. Participants highlighted the importance of facilitating the creation of alternative fund vehicles to broaden investment avenues within the asset management space. The need to enhance retail participation in mutual funds was emphasised as a key priority to deepen the savings base and expand financial inclusion. The importance of fostering greater participation by non-bank financial institutions was also highlighted in the context of strengthening the mutual fund industry and overall market development. Participants also shared views on National Savings Schemes (NSS), emphasising the need to align these instruments with broader market dynamics to avoid distortions and ensure a level playing field across savings products. A gradual and well-coordinated approach in this regard was considered important. Aurangzeb acknowledged the perspectives shared by the delegation and noted that their proposals would be carefully reviewed in the context of the ongoing budget formulation process. He emphasised the government’s focus on creating a balanced and enabling environment that supports the growth of the asset management industry while maintaining financial stability, and reiterated the need to further strengthen the savings ecosystem as a key pillar of sustainable economic development.
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