Mattias Martinsson, Chief Investment Officer and co-founder of Tundra Fonder-Swedish mutual fund that invests in frontier markets including Pakistan markets voiced his concern over rumours of high taxes being imposed on capital markets in upcoming budget that is set to be announced on June 12.

Sharing his thoughts on rumoured proposal, Mattias, while addressing Prime Minister Shehbaz Sharif in post on social media platform X, said, “For years, we have repeatedly called for Pakistan to abandon its counterproductive capital gains tax and replace it with turnover based tax like Vietnam has (10bps when selling).” Martinsson said that turnover tax is much simpler to collect and would result in significantly more revenue for Federal Board of Revenue. “Most importantly, it will make administrative hurdles for foreign investors bearable,” said Mattias. Expert shared that Vietnam currently turns over $ 500-1,000 million daily against Pakistan’s $ 50-100 million. “When we started investing in Vietnam back in 2013 turnover was $ 100-200 million day,” he shared. Mattias said that it takes about 1-2 months for new foreign investor to get access to Pakistani equities, and major hassle is monthly tax collection where local tax advisor is required. “Why should state care about equity market, if it is so tiny? “We want big projects. Well, because it is starting point for valuation of unlisted investments.  “Why not do what you can to improve valuations before slumping away state assets?” questioned Mattias.  

“I really hope sanity prevails on this one. Abandon CGT for foreign investors once and for all.”  “What if focus was to bring back Pakistan to that point? Make cake bigger, and there will actually be something to collect for state-and people,” he said.