The Overseas Investors Chamber of Commerce and Industry (OICCI) has unveiled its Federal Budget 202526 recommendations, calling for significant tax reforms to broaden the tax base and enhance revenue generation.
The OICCI asserts that equitable tax contributions across all sectors, in line with their GDP share, could raise the taxtoGDP ratio to 14 percent from its current sub10 percent level.
Among the key proposals is a reduction in the Corporate Tax Rate to 28 percent for the upcoming fiscal year, with a plan to decrease it annually by one percent, reaching 25 percent in five years. This adjustment aims to align Pakistan”s tax structure with other emerging economies.
The OICCI stressed the need to incorporate traditionally undertaxed sectors like agriculture, real estate, and wholesale/retail trade into the formal tax system. Additionally, it recommends an immediate reduction of the sales tax rate on goods to 17 percent, with a gradual decrease to 15 percent, harmonizing rates between federal and provincial governments.
The Chamber also advocates for the phased elimination of the Super Tax over three years to foster a more businessfriendly environment. Addressing tax evasion in the illegal cigarette trade, which causes over Rs300 billion in losses, is a priority for the OICCI.
OICCI President Yousaf Hussain emphasized the urgency of modernizing Pakistan”s tax system to create a transparent and equitable framework that stimulates economic growth and investment.
In the energy sector, the OICCI suggests taxing all major petroleum products appropriately to ensure fair contributions. It also highlights the need for the Federal Board of Revenue (FBR) to release over Rs120 billion in pending tax refunds to boost investor confidence and attract foreign direct investment.
Raising the taxable income threshold to Rs1.2 million annually per individual is another notable recommendation, while maintaining mandatory tax filing for those earning above Rs0.6 million.
OICCI Secretary General M. Abdul Aleem concluded by noting that with consistent policy reforms, Pakistan can expand its revenue base and become a more attractive investment destination. The OICCI remains committed to supporting the government in crafting policies that drive economic growth and sustainability.