The shadow of Dar’s tax policies continues to haunt corporate Pakistan

In the leadup to the 2023 budget, the halls  of Q-block were buzzing as employees of the finance ministry did their best to try and outdo each other. Their task was very simple: finding ways to collect as much tax as possible. Among the many ideas floating around, one that snuck past everyone and made it into the budget was the idea of taxing bonus shares. 

Either no one realised the chaos this would unleash on the stock market, or no one cared. 

Nothing illustrates this better than the recent dividend declaration made by Mari Petroleum along with their annual financial statements. In fact, what has happened to Mari shows the idea to impose this tax on bonus shares is poorly implemented at best and ill conceived at its worst. The law ensures investors and companies are saddled with excessive burden, and we now have a solid example of investors facing losses because of this plan. 

So what exactly happened over at Mari? To start off, we need to understand how bonus shares work.