As Pakistan prepares for its next federal budget, business leaders are advocating for meaningful changes to boost the economy. They are calling on the government to provide tax relief for the salaried class, reduce the general sales tax (GST), and phase out the super tax. These recommendations come as stakeholders seek to balance fiscal responsibility with the need for economic growth.

Ehsan Malik, Pakistan Business council (PBC) CEO, emphasized the importance of increasing export earnings to support defense spending and manage the fiscal deficit. The PBC’s proposals aim to incentivize export growth and the use of local inputs. The council is also advocating for a gradual reduction in corporate and super taxes, along with the elimination of multiple taxes on inter-corporate dividends.

Industry Leaders unite in Call for Tax Reforms

Business leaders are united in their call for tax reforms that support economic growth and reduce the burden on salaried individuals and industries.

“We urge the government not to throw in surprises and engage all the stakeholders for tax reforms along with ensuring policy consistency,”

M. Abdul Aleem, Chief Executive/Secretary General of the Overseas Investors Chambers of Commerce and Industry (OICCI), has suggested a new approach to this year’s budget. He is urging the government to take bold steps to broaden the tax base by improving tax collection from the trade, services, and agriculture sectors. Aleem also supports tax relief for salaried individuals and the alignment of industry taxes with regional standards. He proposed a gradual reduction in corporate and sales tax rates, along with phasing out the super tax over three years.

Saquib Fayyaz Magoon, Senior Vice-President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), stressed the importance of boosting exports. With the government aiming to avoid future reliance on the International Monetary Fund (IMF) after the current $7 billion Extended Fund Facility, Magoon said policies should be designed to develop the export sector. He advised against imposing new taxes on export-oriented sectors, as this would increase production costs and reduce global competitiveness.

Focus on Industrial Competitiveness and Export Promotion

Jawed Bilwani, president of the Karachi Chamber of Commerce and Industry (KCCI), highlighted the need to enhance industrial competitiveness, promote exports, broaden the tax base, and address structural inefficiencies in the economic framework. He noted that recent macroeconomic improvements provide an chance to implement targeted policies that can foster sustained economic growth.

“We strongly advocate for a broad-based, clear, and predictable tax framework that expands the tax net removes distortions, and fosters a fairer distribution of the tax burden,” Bilwani stated. He added that rationalizing tax regimes, eliminating inefficiencies, and simplifying tax procedures are essential for creating a pro-growth fiscal environment.Bilwani also pointed out that the SME sector, a key driver of economic activity and employment, continues to face challenges due to limited access to finance and a restrictive regulatory environment.

Ahmed Azeem alvi, President of the Site Association of Industry (SAI), urged the government to prioritize industrial growth and exports in the FY26 budget. He suggested widening the tax base, capping business income tax at 25%, abolishing the Super Tax, and reversing recent amendments to the Income Tax Ordinance. alvi also called for a harmonized GST system, faster refunds, a gradual reduction of sales tax to 15%, and the elimination of the additional sales tax to reduce informality. He also demanded an end to Fata/Pata tax exemptions,overhauling welfare schemes,adopting digitalization,and implementing a one-window operation. Alvi further urged the restoration of zero-rated status for export sectors and essential goods.