Budget authorities are reviewing a proposal that would introduce a small transaction tax on the buying and selling of shares in the stock market.

Market reports suggest the government is considering a 0.1 percent levy on equity transactions as part of efforts to raise additional revenue from trading activity. However, the proposal has not been confirmed officially.

If moved forward, the measure would require approval from the Prime Minister during the upcoming Federal Cabinet meeting scheduled for June 5.

Following these reports, investors at the Pakistan Stock Exchange (PSX) adopted a cautious stance on Monday, reflecting uncertainty over potential new taxation on market trades.

A senior Karachi-based broker said the discussions remain speculative at this stage, stressing that no formal decision has been made regarding the proposed tax.

Currently, capital gains tax (CGT) applies to the sale of listed securities. In the previous year, CGT collection stood at around Rs72 billion.

In addition to CGT, stock market participants are also subject to several other levies, including sales tax on services imposed by provincial and federal authorities, super tax, dividend tax, and tax on bonus shares.