The Federal Board of Revenue (FBR) has indicated that the government may introduce additional tax relief for businesses, including a possible complete withdrawal of super tax and a reduction in the sales tax burden. The indication came during a meeting of the Sub-Committee of the Senate Standing Committee on Finance, where representatives of the business community highlighted rising operating costs, expensive financing, high energy prices and concerns regarding tax administration. The business community argued that the existing tax environment is making it increasingly difficult for companies to maintain operations and attract fresh investment in Pakistan.
The meeting brought together government officials and representatives of the business community to discuss measures aimed at improving economic activity and creating more favourable conditions for businesses. Mian Zahid Hussain, Chairman of the Policy Advisory Board of the Federation of Pakistan Chambers of Commerce and Industry, and Tariq Khan Jadoon, Vice President, told the committee that high taxation, costly financing and increasing input prices were placing considerable pressure on businesses. They also raised concerns over what they described as harassment by FBR officials, warning that continued pressure on existing taxpayers could encourage more companies to relocate their operations outside Pakistan.
According to the business representatives, industries are currently operating at around 40 to 45 percent capacity, reflecting the broader challenges facing industrial activity. Committee Convener Muhammad Talha Mahmood said the meeting was intended to identify mechanisms that could support economic activity and establish a more conducive operating environment. He observed that a number of companies were either reducing their operations or leaving Pakistan because of high energy costs and the existing tax burden. Mahmood also expressed concern that several multinational companies had already exited the country.
Hamid Ateeq Sarwar, Member FBR, informed the committee that tax relief measures had already been introduced since 2025 and indicated that the government remained prepared to provide additional relief. He said super tax was one of the areas being considered for further reduction, while measures to reduce the sales tax burden on businesses were also under examination. Sarwar stated that the government had already provided tax relief amounting to approximately Rs361 billion under the directions of the Prime Minister and said the process of rationalising the tax burden would continue.
The FBR official explained that taxation measures had also been influenced by Pakistan’s import requirements and fiscal limitations. He highlighted several relief measures already introduced, including reductions in taxes for salaried individuals, a reduction in super tax and the complete removal of super tax for exporters. Government officials further stated that the revenue impact of these measures was approximately Rs361 billion, with the objective of providing relief to businesses and supporting economic activity.
The government has also established exporters’ facilitation committees in Karachi, Lahore, Sialkot, Faisalabad, Islamabad and Multan to address tax-related concerns. These committees are intended to provide a channel for exporters to raise issues associated with taxation and related procedures.
Mian Zahid Hussain argued that national policy appeared to place excessive emphasis on revenue collection instead of economic expansion. He called for reductions in advance and withholding taxes, rationalisation of customs duties, simpler audit procedures and a review of factory surveillance mechanisms. According to him, complicated tax procedures and extensive compliance requirements have increased the cost of doing business and discouraged industrial expansion.
Tariq Khan Jadoon said that Pakistan continues to have competitive labour costs but businesses face substantial pressure from high electricity tariffs and regulatory requirements. He stressed that the tax base should be expanded by bringing new sectors and businesses into the formal tax system rather than increasing the burden on companies that are already paying taxes. Business representatives also raised concerns about the conduct of FBR field formations, alleging that repeated notices, audits and enforcement actions were creating uncertainty for taxpayers.
The Senate Sub-Committee stressed the importance of establishing a business-friendly tax regime, noting that excessive taxation could eventually weaken government revenue collection by reducing investment and shrinking the formal tax base. Mahmood also questioned the effectiveness of existing measures designed to attract foreign investment and requested information about investor protection and mechanisms governing share transfers. He directed the relevant authorities to provide the committee with a comprehensive briefing on the existing framework.
The absence of the Secretary Finance was also raised during the meeting. Mahmood expressed serious concern over the official’s non-attendance and directed that the Secretary Finance ensure participation in the next meeting. He warned that continued absence could lead to the matter being referred to the Senate Privileges Committee.
The committee convener said sustainable economic growth would require business-friendly policies and transparent governance. He emphasised the importance of having competent and honest officials responsible for developing policies that support investment, industrial activity and entrepreneurship.
FBR officials also informed the committee about administrative reforms aimed at improving taxpayer facilitation. These include the development of a mobile application for tax reimbursements and the introduction of designated facilitation days in major commercial centres across the country. The measures are intended to improve interaction between taxpayers and the tax authorities and address some of the procedural difficulties raised by businesses.
The committee also considered the ongoing goods transport strike and its impact on trade and economic activity. Mahmood expressed concern over delays in resolving the dispute, particularly as perishable goods faced the risk of spoilage and businesses were incurring significant container detention charges. He urged the government to engage immediately with transporters and other affected stakeholders to restore normal commercial activity and limit further economic losses.
Mahmood further recommended that taxpayers who correct genuine errors in their tax returns should have their accounts restored within 24 to 48 hours. He also called for an efficient biometric verification system to make tax-related processes easier for taxpayers and noted that early market closure timings were having a negative effect on commercial activity.
The Sub-Committee ultimately recommended immediate dialogue with transporters and other stakeholders to resolve the ongoing dispute and restore normal business operations. The discussions surrounding super tax, sales tax and broader tax administration indicate that the government is considering additional measures to reduce pressure on businesses, although the meeting did not confirm a final decision to completely withdraw super tax. Further changes will depend on the government’s review of taxation measures, fiscal requirements and the broader business environment.
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