The recent budget proposals that have been made have had one thing in the forefront all along. Tax revenue generation and maximization. With IMF targets to meet and a surplus to be shown, the budget has been designed with that fact in mind. One of the proposals that has been made is to tax the mutual fund industry. The purpose of the taxation is to tax a stream of revenue and income which has earned high amounts of the profits in the last year.
From June 2023, banks and fixed income securities have earned record high profits due to the high level of interest rate. This has been matched by the stock exchange which has also seen a return of almost 92% for the same period. As mutual funds have invested in these two asset classes, they have earned healthy returns.
Now it seems there is a move to tax some of the fixed income mutual funds while equity funds are left unscathed. What are mutual funds? What is the new budget proposal and what long term impact can this tax have on the mutual fund industry of the country? Let Profit explain it all. The content in this publication is expensive to produce. But unlike other journalistic outfits, business publications have to cover the very organizations that directly give them advertisements. Hence, this large source of revenue, which is the lifeblood of other media houses, is severely compromised on account of Profit’s no-compromise policy when it comes to our reporting. No wonder, Profit has lost multiple ad deals, worth tens of millions of rupees, due to stories that held big businesses to account. Hence, for our work to continue unfettered, it must be supported by discerning readers who know the value of quality business journalism, not just for the economy but for the society as a whole.To read the full article, subscribe and support independent business journalism in Pakistan
