Aurangzeb engages insurance and mutual fund sectors in pre-budget consultations for FY2026–27

Finance Minister Muhammad Aurangzeb on Monday held separate meetings with delegations from the Insurance Association of Pakistan (IAP) and the Mutual Funds Association of Pakistan (MUFAP) as part of pre-budget consultations for FY2026–27, focusing on taxation policy, savings mobilisation, and financial sector development.

In the first session, a delegation of the Insurance Association of Pakistan led by Chairman Shoaib Javed Hussain presented proposals on taxation and regulatory issues affecting the insurance industry.

Discussions focused on the interaction between federal and provincial tax regimes and their implications for the sector. Participants emphasised the need for consistency, coherence and predictability in the taxation framework.

The delegation also called for greater clarity in the application of insurance-related laws and their alignment with broader tax and accounting standards. It stressed that regulatory stability was essential for sector development.

Proposals were also put forward to enhance insurance penetration and promote long-term savings, including the possible restoration of tax incentives for policyholders. Expanding participation among salaried individuals was highlighted as a key objective.

Participants further discussed strengthening the insurance sector’s role in financial intermediation through improved alignment of investment frameworks and long-term financial instruments. Ongoing engagement with regulators and policymakers was also underscored.

Aurangzeb acknowledged the proposals and said they would be reviewed during the upcoming budget exercise. He reiterated the government’s commitment to supporting financial sector growth within a balanced fiscal framework.

In a separate meeting, the finance minister met a delegation of the Mutual Funds Association of Pakistan (MUFAP), led by Chairman Shahzad Dada, to discuss the mutual fund industry and its role in savings mobilisation and capital market development.

The MUFAP delegation focused on strengthening the savings ecosystem and improving the efficiency and depth of financial instruments available to investors.

Participants highlighted the need for regulatory improvements to support industry expansion, including the introduction of alternative fund structures to broaden investment options within the asset management sector.

The delegation stressed increasing retail participation in mutual funds as a key priority to deepen the savings base and enhance financial inclusion. Greater involvement of non-bank financial institutions was also highlighted in the context of capital market development.

Views were also shared on National Savings Schemes, with participants suggesting alignment with broader market dynamics to ensure a level playing field and avoid distortions across savings products, recommending a gradual adjustment approach.

Aurangzeb noted the proposals and said they would be considered in the ongoing budget formulation process. He reiterated the government’s focus on strengthening the savings ecosystem while maintaining financial stability and supporting long-term sector growth.