During a visit by Minister of State for Finance and Revenue Bilal Azhar Kayani to the Overseas Investors Chamber of Commerce and Industry (OICCI), the chamber presented its key tax reform proposals for the Federal Budget 2026–27, developed after wide consultations with its member companies. Dr. Najeeb Memon, Director General of the Tax Policy Office (TPO), also joined the meeting virtually.
OICCI Secretary General M. Abdul Aleem said the recommendations focus on creating a fair, predictable, and investment-friendly tax system supported by documentation and digitization. He stressed the importance of expanding the tax base instead of increasing pressure on existing taxpayers. He added that all sectors, including agriculture, retail, wholesale, real estate, and services, should contribute according to their share of economic activity.
The Minister of State welcomed input from foreign investors and highlighted the importance of continued engagement with stakeholders to promote economic growth, expand the tax net, and improve transparency.
OICCI proposed a reduction in the corporate tax rate to 28% in FY2026–27, with a gradual decrease to 25% over the next three years, along with a phased elimination of the Super Tax. The chamber noted that the combined impact of corporate tax, super tax, Workers Welfare Fund, and Workers Profit Participation Fund results in an effective tax rate of nearly 46%.
It also warned that high taxation on the banking sector may slow economic growth by limiting banks’ ability to efficiently provide capital, affecting business financing and overall liquidity in the economy.
To retain skilled professionals, OICCI recommended removing the Super Tax and the 10% surcharge on higher-income salaried individuals, and setting a maximum personal income tax rate of 25%.
Additional proposals included simplifying withholding taxes, reducing sales tax on goods from 18% to 17%, with a gradual reduction to 15%, and reviewing minimum and alternate minimum tax rules.
During the discussion, foreign investors raised concerns over delayed tax refunds, frequent compliance notices despite strong compliance records, and weak coordination between federal and provincial tax systems.
OICCI also emphasized the need to support export-oriented industries as a key driver of medium-term economic growth and suggested targeted policy measures to maintain competitiveness, where necessary, within IMF programme frameworks.
The chamber expressed hope that these reforms would help create a stable tax environment, improve compliance, encourage investment, and support Pakistan’s shift toward sustainable, export-led growth.
The meeting was part of the Ministry of Finance’s broader budget consultation process with business and industry stakeholders.
