The Government of Punjab has officially waived stamp duty on property transfers arising from mergers and schemes of arrangement.
This exemption applies to mergers or schemes approved by the Courts or the Securities and Exchange Commission of Pakistan (SECP). It was notified on February 21, 2026, in line with the Companies Act, 2017.
Court Ruling Prompts Exemption
The notification follows a Lahore High Court (Rawalpindi Bench) judgment reported as 2025 CLD 587. The case was overseen by Honourable Justice Jawad Hassan and Justice Malik Javid Iqbal Wains.
The Court examined whether the Punjab Government could levy stamp duty on merger schemes sanctioned by the Courts or the SECP. During proceedings, the SECP informed the Court that companies with registered offices in Islamabad Capital Territory are already exempt under Section 282(5) of the Companies Act, 2017.
However, this exemption becomes applicable in provinces only after official notification or legislation by the provincial government.
Consultations Between Punjab Government and SECP
The Court directed the Chief Secretary, Punjab, and the SECP to consult on the matter. Following extensive meetings, the Punjab Government issued the notification granting a full exemption from stamp duty.
This applies to property transfers arising specifically from mergers or schemes of arrangement approved by the Court or SECP.
Benefits for Corporate Sector
Since company law is a federal subject, while stamp duty falls under provincial jurisdiction, the previous overlap created challenges. Companies undertaking restructuring and mergers in Punjab faced practical difficulties and additional costs.
The new exemption is expected to:
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Facilitate corporate restructuring and mergers
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Reduce transaction costs
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Encourage investment in the province
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Support overall business growth
SECP Applauds the Decision
The SECP welcomed Punjab’s move, calling it a positive step toward facilitating the corporate sector. The Commission also appreciated the Court’s proactive role in resolving the issue efficiently.
The notification is considered a landmark step in harmonizing federal company law with provincial taxation rules. It ensures smoother operations for companies undergoing mergers or corporate restructuring in Punjab.
Long-Term Impact
Experts believe the exemption could attract more companies to restructure or consolidate, boosting economic activity. By removing the stamp duty burden, Punjab is aligning its policies with investor-friendly practices seen globally.
The move is expected to improve corporate governance and promote timely legal compliance. It may also reduce delays in merger approvals and provide clarity on provincial tax obligations for companies.
