Islamabad: The government is considering proposals to provide relief to salaried individuals while also expanding the tax base by bringing retail and wholesale sectors into the formal tax net as part of the upcoming budget process for FY2026-27, according to the State Minister for Finance.
The remarks were made during a meeting with representatives of the Overseas Chamber of Commerce and Industry (OICCI), where budget proposals from foreign investors and business stakeholders were reviewed. The minister said that input from chambers of commerce and industry is being actively incorporated into ongoing budget consultations.
He added that the government is examining options to simplify the tax structure with the aim of supporting economic activity and maintaining an investment-friendly fiscal environment.
During the meeting, the chamber stressed the need for a broader and more equitable taxation system. It recommended that sectors such as agriculture, retail and wholesale trade, real estate, and services should contribute more fairly to national revenue collection.
Among its key proposals, OICCI suggested reducing the corporate tax rate to 28% in FY2026-27, followed by a phased reduction to 25% over the next three years. It also recommended the gradual removal of the super tax within the same timeframe.
The chamber noted that when corporate tax is combined with the super tax, Workers Welfare Fund, and Workers Profit Participation Fund, the effective tax rate rises to around 46%, which it said is affecting business competitiveness.
Concerns were also raised over high taxation in the banking sector, with the chamber warning that elevated tax rates could restrict lending capacity and increase the overall cost of capital for businesses.
For salaried individuals, OICCI recommended abolishing the 10% surcharge on higher-income earners and capping the maximum personal income tax rate at 25%, as part of broader efforts to provide relief and improve tax fairness.
Officials said the proposals are under consideration as part of wider fiscal policy discussions ahead of the federal budget.
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