The federal government is weighing a set of fiscal proposals ahead of the upcoming budget for FY2026-27 that could bring relief to salaried workers while simultaneously widening the tax net to cover sectors that have long remained on the margins. The State Minister for Finance shared these directions during a consultative session with the Overseas Chamber of Commerce and Industry (OICCI), where foreign investors and industry leaders presented their recommendations.
The minister noted that submissions from business chambers and trade bodies are being actively factored into the budget preparation process, and that simplifying the country’s tax framework remains a priority to sustain economic momentum and keep Pakistan attractive for investors.
Push Toward a More Balanced Tax Framework
OICCI used the platform to advocate for a fairer distribution of the tax burden, calling on sectors such as agriculture, retail and wholesale trade, real estate, and services to contribute more equitably to the national revenue base.
On corporate taxation, the chamber proposed a phased reduction in the corporate tax rate — from its current level down to 28% in the coming fiscal year, with a further reduction to 25% over the following three years. A gradual phase-out of the super tax was also recommended across the same timeframe.
OICCI flagged that once the super tax is combined with levies including the Workers Welfare Fund and Workers Profit Participation Fund, businesses are effectively paying close to 46% in aggregate taxes — a level the chamber says is undermining their ability to compete both regionally and globally.
Banking Sector Taxation Raises Investment Concerns
The chamber also drew attention to the elevated tax burden on Pakistan’s banking sector, warning that excessive taxation at this level could constrain banks’ lending capacity and push up the cost of capital for businesses seeking financing.
Salaried Class May See Some Relief
Among the more direct proposals for individual taxpayers, OICCI recommended scrapping the 10% surcharge currently applied to higher-income earners and capping personal income tax at a maximum of 25%. The chamber argued these steps would make the tax system more equitable and ease the burden on salaried professionals.
Government officials confirmed that all proposals submitted during the consultation are under active review as part of the broader pre-budget fiscal deliberations.
