IAP suggests relief, tax incentives

ISLAMABAD: The Insurance Association of Pakistan (IAP) has proposed relief measures with possible restoration of tax incentives for policyholders for promoting savings and expanding insurance penetration in budget (2026-27). Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, held a meeting at the Finance Division Tuesday with a delegation of the IAP to discuss matters relating to the insurance sector in the context of the Federal Budget 2026–27. The delegation was led by Shoaib Javed Hussain, Chairman IAP. The Finance Minister welcomed the delegation and appreciated the constructive engagement of the insurance industry in contributing to the budget consultation process. He emphasized the need for sustained dialogue with key sectors to ensure that policy measures remain aligned with economic priorities and contribute to long-term financial stability and growth. The delegation presented a set of proposals focusing primarily on taxation and regulatory considerations with respect to the insurance sector. Participants discussed various aspects of the existing taxation framework, including the interaction between federal and provincial levies, and their implications for the sector. The need for consistency, coherence, and predictability in the overall tax structure was highlighted in the context of facilitating sectoral development. Discussions also covered the need to ensure clarity in the application of sector-specific laws governing insurance, particularly in relation to the broader taxation framework. The delegation underscored the importance of ensuring that existing legal and regulatory principles remain appropriately aligned with evolving policy and accounting standards. The delegation further proposed measures aimed at promoting savings and expanding insurance penetration, including the possible restoration of tax incentives for policyholders. Facilitating long-term savings instruments and encouraging wider participation, particularly among salaried individuals, were identified as key areas for consideration. Participants also shared views on strengthening the role of the insurance sector in financial sector development, including through improved alignment of investment frameworks and long-term financial instruments. Continued interaction with regulators and policymakers on sector-specific issues was highlighted as essential. The Finance Minister acknowledged the proposals presented by the delegation and noted that these would be carefully reviewed in the context of the upcoming budget. He reiterated the government’s commitment to advancing the development of the financial sector, while maintaining a balanced and sustainable approach to fiscal policy. The meeting concluded with a shared understanding on the need for ongoing engagement between the Government and the insurance industry to facilitate informed policymaking and enhance the sector’s contribution to economic growth. Copyright Business Recorder, 2026

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