MH Insights

Executive Summary This briefing synthesizes critical developments across Pakistan's economic landscape, regulatory environment, and financial markets as of December 23, 2025. The nation's cotton and textile sector is navigating an unprecedented crisis, marked by widespread mill closures due to prohibitive costs and competition from cheap imports. Concurrently, the government is advancing its privatization agenda with a fresh bidding process for Pakistan International Airlines (PIA) scheduled. In the regulatory sphere, significant updates to Pakistan's tax code for 2026 are highlighted, establishing new requirements for advance tax payments, inter-regional tax recovery, and liabilities for residents departing the country. The energy sector is also at a pivotal juncture, with proposed regulations for solar prosumers sparking concern over the future of renewable energy adoption. Financial markets exhibit a mixed but telling picture. The Pakistan Stock Exchange (PSX) shows sign...

This briefing synthesizes critical developments across Pakistan's economic, regulatory, and corporate landscapes as of December 22, 2025. The day is marked by a bullish equity market, significant regulatory clarifications from the Federal Board of Revenue (FBR) for the upcoming tax year, and major strategic initiatives by leading corporations. Key takeaways include the Pakistan Stock Exchange reaching all-time highs, driven by an unexpected policy rate cut by the State Bank of Pakistan (SBP) and improving foreign exchange reserves. Concurrently, the FBR has detailed stringent enforcement and recovery mechanisms for Tax Year 2026, outlining the personal liability of liquidators, the process for third-party fund recovery, and severe penalties for defaulters, including property seizure and arrest. Sectoral performance shows a stark contrast, with the automotive industry demonstrating a robust recovery evidenced by a 92% year-on-year increase in tax collection for November 2025, while ...

Federal Board of Revenue (FBR) has made history by updating and uploading electronic income tax return form for salaried and business individuals, Associations of Persons and Companies immediately after the close of the financial year 2021 i.e. on 01 July 2021. After the years of shameful experience of repeatedly giving extensions to the filers due to faults and bugs in the income tax return form, FBR this year planed beforehand. Plan the execution of which is spans the whole year was made part of rules through SRO 1185 (I) /2020 dated 6 November 2020.  Following is the snapshot of the notification: Reference Number: SRO 853 (I)/2021 Description: Electronic Income Tax Return Form  Date of Issuance: 01 July 2021 Objective: To provide error-free income tax return form in a timely manner to salaried and business individuals, Associations of Persons and Companies Effective Date:  Immediate  Hopefully electronic income tax return will be free from errors and bugs ...

The Securities and Exchange Commission of Pakistan has increased by 10% all the fees to be paid to the registrar and the commission by a Company having a share capital. The Commission declared this in the notification SRO 808 (I) / 2021 dated 28 June 2021. 

Section 3(2)(a) / Eight Schedule. Scope of Tax: Section 3(2)(a) of the Act specifies that goods included in the Eight Schedule shall be charged to tax at such rates and subject to such conditions and limitations which have been mentioned therein. The Finance bill has proposed to exclude some items from Eight Schedule which will be subject to 17% of sales tax after the approval of the bill. Following is the list of items which are used in textile sector: S. No. Description Existing Tax Rate Revised Tax Rate 5 Import of raw cotton and ginned cotton 5% 17% 6 Plant and machinery not manufactured locally and having no compatible local substitutes 10% 17% 50 Import of LNG / RLNG 12% 17% 51 Supply of LNG / RLNG to gas transmission and distribution companies 12% 17% 65 Ginned ...

Securities and Exchange Commission of Pakistan in the Circular No. 16 of 2021 dated 10 June 2021 has prescribed the requirements for Asset Management Companies (AMCs) about the advertisement related to equity schemes of an Open-end Collective Investment Scheme in print and social media. The Circular accompanies a standard format for the advertisement describing in detail the layout and font size of the advertisement.  The Circulars states that calculation of return used in the advertisement shall be based on a minimum period of twelve preceding months on rolling basis. If an AMC launches a new fund, performance data of this CIS shall be presented only if the track record of last six-month performance is available.  The AMCs shall immediately remove the outdated advertisement from print and social media.  Please click here for more details.

Securities and Exchange Commission of Pakistan on 17 June 2021 issued Circular 17 of 2021 in order to allow that investment made by a company out of provident fund or any other employee contributory retirement fund can me made in Exchange Traded Fund (ETF) being the open-end collective investment scheme (CIS) registered as notified entities with the commission. The investment will be subject to following limited and conditions of Employees Contributory Funds (Investment in Listed Securities) Regulations, 2018. Limits for investment in Listed Securities Regulation Reference Description Maximum Limited * 3(1)(a) Total investment in Debt CIS including Debt ETF 50% 3(1)(c) Total investment in equity CIS including equity ETF 30% 3(8) Total investment in Debt CIS including Debt ETF managed by a single asset management company 50% of 3(1)(a) 3(9) Tot...

Snapshot Reference No. SRO 639 (I)/202 1 Description Setting off of Loss on Disposal of Listed Securities (Draft Amendment in Income Tax Rules) Date of Issuance 1 June 20 21 Objective To allow to carry forward the loss against gain on disposal of listed securities Effective date FBR has sought objection or suggestion on the draft to be sent within 15 days of the publication of notice.   Explanation The draft amendments have suggested changes in the following rules of Income Tax Rules, 2002: Rule 13D deals with computation of capital gain or loss. Currently, capital loss arising on the disposal of securities in any tax year is not allowed to be carried to the subsequent years. The draft amendments suggests that any loss on the disposal of listed securities from FY 2019 to onward if could not be set off against the gain on the disposal of other listed securiti...

Federal Board of Revenue (the Board) issued SRO 101(I)/2021 on 28 January 2021 to notify the names of 6 more persons for the panels for Alternate Dispute Resolution Committee (ADRCs) in Multan, Islamabad and Karachi. These six person are in addition to already notified vide SRO 810 (I)/2020 by FBR. Snapshot Reference No. SRO 101 (I)/202 1 Description Constitution of Alternate Dispute Resolution Committee Date of Issuance 28 January 20 21 Objective To increase number of persons on the panel of Alternate Dispute Resolution Committee Effective date Immediate