Corporate Boost: Punjab Waives Stamp Duty on Court and SECP-Approved Mergers

ISLAMABAD – In a landmark move to facilitate the ease of doing business, the Government of Punjab has officially notified a complete waiver of stamp duty on property transfers resulting from corporate mergers and schemes of arrangement.

This exemption applies to all restructuring schemes approved by either the Securities and Exchange Commission of Pakistan (SECP) or the Courts, bringing provincial policy in line with the federal Companies Act, 2017.

Legal Precedent: The Lahore High Court Ruling

The decision follows a pivotal judgment by the Lahore High Court (Rawalpindi Bench) in the case 2025 CLD 587. The bench, comprising Honourable Justice Jawad Hassan and Justice Malik Javid Iqbal Wains, addressed whether the provincial government could levy duties on mergers already sanctioned under federal law.

During the proceedings, the SECP highlighted that while companies in the Islamabad Capital Territory (ICT) enjoyed exemptions under Section 282(5) of the Companies Act, provincial application required specific local notification.

Bridging the Federal-Provincial Gap

Because company law is federal but stamp duty is provincial, the overlap had long been a “tax trap” for businesses looking to consolidate. Key highlights of the resolution include:

• Direct Consultation: The Court mandated a collaborative effort between the Chief Secretary of Punjab and the SECP.
• Cost Reduction: Companies will no longer face heavy duty percentages on the transfer of immovable assets during a merger.
• Economic Growth: The move is designed to encourage corporate scaling, foreign investment, and streamlined business operations within Punjab.

SECP Response

The SECP has lauded the Punjab Government’s proactive stance. A spokesperson stated that the move is a “positive milestone for the corporate sector,” praising the judiciary for its role in resolving the long-standing jurisdictional ambiguity.