Mutual funds, insurers seek budget incentives

Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb held separate meetings with delegations of the Mutual Funds Association of Pakistan (MUFAP) and the Insurance Association of Pakistan (IAP) to discuss proposals for the federal budget 2026-27, according to official statements issued on Tuesday.

Welcoming the delegations, the finance minister appreciated the continued engagement of the asset management and insurance industries in supporting policy dialogue. He acknowledged the significant role of the mutual fund sector in mobilising savings and strengthening capital markets.

During the MUFAP meeting, participants highlighted the need to reinforce institutional mechanisms for savings mobilisation and to facilitate the creation of alternative fund vehicles to broaden investment avenues. Enhancing 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, stressing the need to align these instruments with broader market dynamics to avoid distortions and ensure a level playing field across savings products. The finance minister noted that the proposals would be carefully reviewed during the budget formulation process.

In the separate meeting with the IAP delegation, led by Chairman Shoaib Javed Hussain, the insurance industry presented proposals focusing primarily on taxation and regulatory considerations. Participants discussed the existing taxation framework, including the interaction between federal and provincial levies, and highlighted the need for consistency and predictability.

The delegation proposed measures to promote savings and expand 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.

The finance minister reiterated the government's commitment to advancing the financial sector while maintaining a balanced and sustainable approach to fiscal policy. The meetings concluded with a shared understanding on the need for ongoing engagement to support informed policymaking and enhance the sector's contribution to economic growth.

The meetings were attended by senior officials from the Ministry of Finance including the director general of the Tax Policy Office and member (Inland Revenue Operations), alongside representatives from MUFAP and IAP.