The Overseas Investors Chamber of Commerce and Industry (OICCI) has called on the government to shift its fiscal strategy toward expanding the tax base rather than increasing pressure on existing taxpayers, as part of consultations for the upcoming Federal Budget 2026–27. The recommendation was presented during a meeting with Minister of State for Finance Bilal Azhar Kayani, highlighting concerns from foreign investors operating in Pakistan.
The engagement took place as part of the Ministry of Finance’s broader consultation process with industry stakeholders. During the session, the OICCI shared a set of tax proposals developed through detailed discussions with its member companies. The meeting also included participation from Tax Policy Office Director General Dr. Najeeb Memon, who joined virtually. Minister Kayani welcomed the input from international investors and emphasized the importance of continued dialogue between policymakers and the business community. He noted that stakeholder engagement plays a key role in designing policies that support economic growth, improve transparency, and expand the country’s tax base.
A central element of OICCI’s proposal is the gradual reduction in corporate tax rates. The chamber recommended bringing the rate down to 28 percent in fiscal year 2026–27, followed by a phased reduction to 25 percent over the next three years. In parallel, it proposed the gradual elimination of the super tax, arguing that the cumulative tax burden on corporations remains significantly high. According to the chamber, when corporate tax is combined with super tax, the workers welfare fund, and the workers profit participation fund, the effective tax rate rises to nearly 46 percent. This level of taxation, OICCI noted, can limit business expansion and reduce Pakistan’s attractiveness as an investment destination.
The chamber also raised concerns about the high taxation imposed on the banking sector. It warned that excessive tax pressure on financial institutions could restrict their ability to deploy capital efficiently, ultimately affecting the availability and cost of financing for businesses across the economy. In addition to corporate taxation, OICCI highlighted the need to reform personal income tax structures to retain skilled professionals. It recommended abolishing the super tax and removing the 10 percent surcharge on higher-income salaried individuals, while capping the maximum personal income tax rate at 25 percent.
The proposals further include rationalizing withholding tax mechanisms and reducing the general sales tax on goods from 18 percent to 17 percent, with a long-term target of 15 percent. The chamber also suggested reviewing minimum tax and alternate minimum tax provisions to simplify compliance and reduce distortions. OICCI Secretary General M. Abdul Aleem emphasized that the goal of these recommendations is to create a fair, predictable, and investment-friendly tax environment. He stressed the importance of documentation and digitization in strengthening the tax system, noting that technology-driven reforms can improve compliance and transparency.
A key theme throughout the discussion was the need to bring under-taxed sectors into the formal tax net. The chamber identified agriculture, retail and wholesale trade, real estate, and services as areas that should contribute proportionately to their share in the economy. Foreign investors also highlighted operational challenges during the meeting, including delays in tax refunds, excessive compliance notices despite strong track records, and limited coordination between federal and provincial tax systems. Addressing these issues, they argued, would significantly improve the ease of doing business in the country.
The chamber also underscored the importance of supporting export-oriented industries as part of Pakistan’s medium-term growth strategy. It suggested that targeted policy support and flexibility within existing international financial program frameworks could help maintain competitiveness in global markets. OICCI expressed optimism that its proposed measures, if implemented, would help establish a balanced tax regime, enhance investor confidence, and support Pakistan’s transition toward a more sustainable and export-driven economic model.
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