PSX Urges Tax Dispute Fix, SME Credit Boost

Karachi, June 9 — The Pakistan Stock Exchange (PSX) has pressed federal and provincial governments to escalate jurisdictional disputes over sales tax on services to the Council of Common Interests (CCI), demanding a unified revenue-sharing formula to resolve overlapping tax laws that plague the services sector, a statement reveals. Provincial sales taxes—ranging 15%-16%, with 19.5% on telecom services—clash across Sindh, Punjab, and Khyber Pakhtunkhwa, where Sindh taxes at business registration, while Punjab and KPK levy at service location, sowing confusion for PSX-listed companies with a Rs14.73 trillion market cap ($52 billion, or 12.7% of GDP).

The PSX flagged this in its FY26 budget proposals to the Ministry of Finance, urging a CCI resolution for consistency. It also seeks to scrap the minimum tax regime for listed firms, citing their high compliance and regulatory burden, and proposed 50% tax credits for SMEs for 3-4 years (then 20%) to boost listings. Further, it calls to align capital gains tax (CGT) rates with immovable property, harmonize derivatives with PMEX contracts, offer tax relief for foreign investment, and push digitization for transparency.

Web context notes Pakistan’s tax disparity issues (e.g., 30% compliance gap, web ID: 0), while X posts show mixed views—some back reform, others fear business strain. Critically, the narrative of “unity” may mask policy friction—web sources highlight inter-provincial rivalry, and X sentiment suggests distrust in execution, hinting at sectoral risks.