ISLAMABAD, Oct 26 (DNA):Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb on Monday emphasized the need for a transparent, commercially viable and investor-friendly framework that would help mobilize domestic savings, attract institutional investment and support private-sector-led economic growth.
The minister chaired the third meeting of the committee tasked with developing the National Private Equity Framework, reviewing progress on regulatory and taxation reforms, domestic capital mobilization and the development of investment opportunities to support a robust private equity ecosystem in Pakistan.
The Finance Minister appreciated the substantive progress achieved across key workstreams and underscored the importance of translating regulatory and policy reforms into practical investment opportunities, said a press release.
The committee reviewed the potential of Pakistan’s private equity market, including opportunities arising from acquisitions, business consolidation, new projects and exits by existing investors. Discussions highlighted the prospects of developing a substantial pipeline of investable opportunities over the next five to ten years, supported by significant domestic liquidity that could be channelled towards productive economic activity through an effective private equity ecosystem.
A key focus of the meeting was the mobilization of domestic institutional capital, including resources available with banks, insurance companies, mutual funds, pension schemes and development finance institutions, alongside potential participation from local corporations and family offices.
The Committee discussed suitable investment structures and mechanisms to facilitate the deployment of these resources into private equity funds and commercially viable businesses and projects.
The Finance Minister emphasized that mobilizing domestic capital should be the immediate priority, providing the foundation for a credible and functioning private equity market capable of subsequently attracting foreign institutional investors and facilitating international co-investment.
Reviewing progress on regulatory reforms, the committee discussed measures concerning fund structures, transparency, investment arrangements and the participation of financial institutions in private equity funds. The State Bank of Pakistan (SBP) briefed participants on recent regulatory changes, including the enhancement of the permissible investment limit for banks in a single private equity fund from 10 percent to 20 percent.
On taxation, the committee reviewed recommendations for establishing a clear, competitive and predictable tax framework for private equity funds. Discussions included the proposed treatment of private equity funds as pass-through vehicles, with taxation applied at the investor level, as part of efforts to develop a globally competitive private equity ecosystem.
The Finance Minister stressed the importance of comprehensively evaluating relevant international taxation models and adapting them to Pakistan’s economic and regulatory environment. He emphasized that any proposed tax arrangements must support legitimate investment activity while preventing opportunities for tax arbitrage, unintended distortions or regulatory inconsistencies.
The committee also underscored the need for a coordinated approach across regulatory and taxation authorities to ensure consistency in the treatment of different investment vehicles and facilitate the development of a well-functioning private equity market.
The Finance Minister directed relevant stakeholders to build on the progress achieved, address outstanding regulatory and taxation issues, and advance work on domestic capital mobilization and the identification of viable investment opportunities to move the National Private Equity Framework towards implementation.
Reiterating the Government’s broader reform priorities, Senator Muhammad Aurangzeb emphasized that the development of a robust private equity ecosystem should contribute to deeper domestic capital markets, improved access to long-term risk capital, greater private-sector investment and sustainable economic growth.
The meeting was attended by the Adviser to the Prime Minister on Privatization, the Secretary Finance, the Chairman Federal Board of Revenue (FBR), and other members of the Committee representing relevant public- and private-sector institutions.
