The Overseas Investors Chamber of Commerce and Industry (OICCI) has expressed strong dissatisfaction with the limited efforts to correct the unfair corporate tax structure in the government’s latest budget. While acknowledging the slight reduction in the super tax rate, the chamber reiterated the urgent need for broad reforms in the tax system to enhance Pakistan’s global competitiveness and attract foreign investment.
In addition to concerns about the tax framework, the OICCI criticized the absence of substantial cuts in government expenditures, which could have helped reduce the budget deficit. The chamber emphasized the necessity of fiscal discipline in state spending to ensure financial stability.
Furthermore, the OICCI regretted the missed opportunity in the budget to expand the tax base, particularly by formally incorporating the estimated 9 trillion rupees of undocumented cash economy. The chamber pointed out a lack of clear strategy in this regard.
On a positive note, the OICCI appreciated budget measures such as simplifying tax returns for employees and small businesses, implementing einvoicing nationwide, and expanding the scope of POS systems. However, the chamber warned that the effectiveness of these measures depends on their proper implementation, transparency, and continuity.
The increase in the tax exemption threshold for employees and reduction in tax rates were acknowledged as steps in line with OICCI’s recommendations, although deemed insufficient to curb the ongoing brain drain in the country.
The chamber recognized the gradual phasing out of tax exemptions for the FATA and PATA regions and stringent actions against nonfilers, including restrictions on property and vehicle transactions and transfers of international assets, as crucial steps to expand the tax network and enhance the system’s effectiveness.
Despite these measures, the OICCI expressed disappointment over the absence of a comprehensive policy for the corporate sector in the budget. The chamber insists that phased reforms in tax slabs and a significant reduction in the overall tax burden are essential to create a more favorable business environment and attract investors.