Islamabad: The government will consider proposals for providing relief to salaried individuals in the upcoming budget cycle for 2026-27, alongside broader measures aimed at expanding the tax base and improving revenue collection, State Minister for Finance Bilal Azhar Kiani said on Monday.
He shared these remarks during a meeting with the Overseas Chamber of Commerce and Industry (OICCI), where budget recommendations from foreign investors and business stakeholders were reviewed. The discussions form part of ongoing consultations ahead of the federal budget formulation process.
According to the minister, input from chambers of commerce and industry stakeholders is being actively incorporated into policy deliberations. He said the government is also examining ways to simplify the tax structure to encourage economic activity and improve compliance.
He added that efforts are underway to make the fiscal framework more investment-friendly while ensuring a fair distribution of the tax burden across different sectors of the economy.
During the meeting, the OICCI proposed a broader and more equitable taxation system, suggesting that under-taxed sectors such as agriculture, retail and wholesale trade, real estate, and services be brought more effectively into the tax net to strengthen revenue generation.
The chamber also recommended reducing the corporate tax rate to 28% in FY2026-27, with a gradual reduction to 25% over the next three years. It further proposed the phased removal of the super tax during the same period.
It noted that the cumulative impact of corporate tax, super tax, Workers Welfare Fund, and Workers Profit Participation Fund results in an effective tax rate of around 46%, which it said affects business competitiveness and investment sentiment.
Concerns were also raised over the taxation burden on the banking sector, with the chamber warning that high taxes could restrict lending capacity and increase the cost of capital for businesses.
For salaried individuals, the OICCI recommended abolishing the 10% surcharge on higher-income earners and capping the maximum personal income tax rate at 25%, arguing that such measures would provide relief and support consumption-led growth.
The government is expected to further evaluate these proposals as part of broader budget consultations in the coming weeks.
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