Pakistan’s finance minister has begun reviewing proposals from the insurance industry ahead of the federal budget for 2026-27, with discussions centring on tax policy, regulatory clarity and measures to support wider insurance penetration.

According to a statement from the Finance Ministry, Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb met with a delegation from the Insurance Association of Pakistan, led by its chairman, Shoaib Javed Hussain. The meeting formed part of the government’s broader pre-budget consultation process and focused on the insurance sector’s priorities for the coming fiscal year.

Aurangzeb welcomed the industry’s input and said continued engagement with key sectors was important to ensure policy measures remain aligned with economic priorities and contribute to financial stability and growth. The ministry said the discussions covered a range of taxation and regulatory issues affecting insurers, including how federal and provincial levies interact and the implications that has for the sector’s development.

What the industry needs

The delegation stressed the need for greater consistency, coherence and predictability in the tax structure, arguing that these factors are important for the industry’s long-term growth. Participants also discussed the application of sector-specific insurance laws and the need to ensure that legal and regulatory principles remain aligned with changing policy and accounting standards.

Another key area of discussion was the possible use of tax incentives to encourage savings and boost insurance uptake. The delegation proposed measures aimed at promoting long-term savings and broadening participation in insurance products, particularly among salaried individuals. Restoring tax incentives for policyholders was highlighted as one option that could help improve penetration in a market where insurance uptake remains relatively low.

The meeting also touched on the role of the insurance sector in broader financial sector development. Participants exchanged views on how better alignment of investment frameworks and long-term financial instruments could support the industry’s contribution to the economy. The importance of continued coordination with regulators and policymakers on sector-specific matters was also underlined.

Aurangzeb acknowledged the proposals put forward by the Insurance Association of Pakistan and said they would be reviewed carefully as part of the budget process. He reiterated the government’s commitment to supporting financial sector development while maintaining a balanced and sustainable fiscal approach.

The meeting ended with both sides expressing support for continued dialogue between the government and the insurance industry, reflecting a shared view that regular engagement will be necessary to support informed policymaking and strengthen the sector’s role in economic growth.

Those attending included Hussain, senior vice chairman Muhammad Hisham, IAP tax committee chairman Omer Farooq, IAP tax committee member Asim Nagi, other IAP officials, and senior Finance Ministry representatives including the director general of the Tax Policy Office and the member for Inland Revenue Operations.