Pakistan has to rationalise tax incentives so that investment in productive sectors can increase, remarked Adviser to Prime Minister on Finance and Revenue Shaukat Tarin.
Attending a gong-beating ceremony as chief guest at the Pakistan Stock Exchange (PSX) on Friday, Tarin expressed the desire to see investment in different productive sectors of the country.
Speaking about the real estate sector, the adviser said that the sector played a crucial role in boosting the economy and creating employment opportunities as it supported around 40 other industries.
But the country had to make sure that the benefits for the real estate sector were aligned with those given to other productive sectors of the economy, he added.
“We see an anomaly in the real estate sector when plots of land are bought and held for years,” he said and added: “That is sinking productive capital.”
In this regard, Pakistan would be introducing certain scheme of taxes that would be applicable to these assets so that money could be recycled to other sectors of the economy as well, he revealed.
“We are also approving Real Estate Investment Trust (REIT) listings, which will benefit the capital market,” he highlighted.
The adviser pointed out that the government was in favour of listing state-owned enterprises (SOEs), which were currently encumbered by circular debt that had choked some of the public sector entities, especially in the energy sector. “We are, however, in the process of unlocking that,” he said.
Listed petroleum and some power companies would see some activity and that would help the stock exchange, as these were heavyweight companies, he highlighted.
On the occasion, Tarin appreciated the first listing on the Growth Enterprise Market (GEM) board of the PSX and recommended small and medium enterprises (SMEs) to capitalise on the opportunity and raise capital through the stock exchange.
Pak Agro Packaging Limited became the first company to be listed on the GEM board - a listing platform created to facilitate enterprises whether small, medium or Greenfield businesses in their capital needs.
Securities and Exchange Commission of Pakistan (SECP) Chairman Aamir Khan stated that the commission had always focused on improving access to finance for the SMEs.
The GEM board would facilitate small enterprises, start-ups and Greenfield companies in gaining access to private capital, he added.
AKD Securities Chief Executive Officer Farid Alam termed SMEs the backbone of any developing economy.
“The growth path that we as a nation have embarked upon, requires contribution from all participants of the economic value chain,” he underlined.
By introducing the GEM board, the SECP and PSX with the help of financial sector entities allowed SMEs access to the “integral capital for long-term growth”, he added.
Pak Agro Packaging Chairman Safdar Ali Butt, in a video message, said that the misconception of SMEs being a risky proposition had not stopped informed and sensible investors, particularly institutional investors, from investing in the “potentially enormous future of SMEs”.
The company raised an amount of Rs198 million against total bids of Rs366.453 million (or 14.79 million shares) at the strike price of Rs24.75 per share.
Published in The Express Tribune, November 27th, 2021.
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