PBC Budget Proposals Urge GST Cuts and Relief for Salaried Class

KARACHI: Business leaders, including the Pakistan Business Council (PBC), have unveiled key recommendations ahead of the federal budget, urging the government to incorporate PBC budget proposals that offer relief to the salaried class, reduce the general sales tax (GST), and phase out the super tax to stimulate economic growth and boost exports.

The PBC budget proposals emphasize the need for fiscal incentives to drive export-led growth and the indigenisation of inputs. Ehsan Malik, CEO of the Pakistan Business Council, stated that while managing the fiscal deficit and stabilizing the external account remain priorities, it is now crucial to strengthen defence spending through enhanced export earnings.

The proposals also call for a gradual rollback of corporate and super taxes and the elimination of multiple taxation on inter-corporate dividends. Malik added that GST, currently at 18%, encourages tax evasion and should be reduced. He stressed that an increased tax-to-GDP ratio should result from business expansion, not additional taxes on compliant taxpayers.

The Overseas Investors Chamber of Commerce and Industry (OICCI) echoed similar sentiments. Its Chief Executive and Secretary General, M. Abdul Aleem, urged the government to take bold and inclusive steps in this year’s budget. He emphasized expanding the tax net by ensuring effective collection from the trade, services, and agriculture sectors.

Aleem also advocated for tax relief for the salaried segment and the rationalisation of industrial tax rates in line with regional benchmarks. He supported a phased withdrawal of the super tax over the next three years and a gradual reduction in corporate and sales taxes. “The government must avoid abrupt changes and engage all stakeholders in meaningful tax reform while ensuring policy continuity,” he said.

Export Growth and Fiscal Stability Take Center Stage

Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Saquib Fayyaz Magoon highlighted the importance of developing export-oriented policies, especially in light of the government’s stated intention to avoid future International Monetary Fund (IMF) assistance after completing the current $7 billion Extended Fund Facility.

Magoon advised against introducing new taxes on export-focused sectors, warning that higher production costs would diminish their global competitiveness.

Jawed Bilwani, President of the Karachi Chamber of Commerce and Industry (KCCI), called for targeted policies to enhance industrial competitiveness and export capacity. He recommended broadening the tax base, removing inefficiencies, and addressing structural challenges.

Bilwani noted that recent macroeconomic improvements present an opportunity to implement strategic fiscal reforms. “We strongly advocate for a broad-based, transparent, and predictable tax regime that expands the tax base and distributes the burden more fairly,” he stated. Simplifying tax procedures and eliminating aggressive tax measures are essential for a business-friendly environment, he added.

He also stressed the challenges facing the SME sector, which remains a key driver of employment and economic activity, citing limited access to finance and restrictive regulations as major hurdles.

Site Association of Industry (SAI) President Ahmed Azeem Alvi urged the government to prioritize industrial expansion and exports in the FY26 budget. He called for capping business income tax at 25%, abolishing the super tax, and reversing controversial amendments to the Income Tax Ordinance.

Alvi also recommended implementing a harmonised GST structure, quicker refund processes, and reducing the sales tax rate gradually to 15%. He demanded the abolition of additional sales taxes, an end to tax exemptions for Fata and Pata, and reforms in welfare programs.

He also called for improved digitalization, one-window operations, and the restoration of zero-rated status for export sectors and essential goods to reduce informality and improve compliance.

As the government prepares the upcoming federal budget, stakeholders across industries are rallying behind the PBC budget proposals, urging fiscal reforms that support growth, fairness, and long-term economic sustainability.