The Overseas Investors Chamber of Commerce & Industry (OICCI) has submitted its budget proposals for 2025–26, urging the government to introduce wide-ranging tax reforms and strategic incentives to support economic growth and digital transformation. A key recommendation is to exempt duties and taxes on infrastructure needed for 5G deployment, which the Chamber views as critical for Pakistan’s digital advancement. OICCI also urged the removal of the 5% regulatory duty on telecom power equipment, including batteries, to reduce costs for telecom operators.
On the corporate taxation side, the Chamber proposed a gradual reduction of the corporate tax rate from 28% to 25%, decreasing 1% annually to align with regional economies. It also recommended phasing out the Super Tax over the next three years—6% in 2025–26, 3% in 2026–27, and full elimination by 2027–28—to lessen the burden on compliant businesses.
For equitable taxation, OICCI called for the alignment of the tax rate of banks with that of other sectors. Other key proposals include restoring the commissioner’s authority to issue 100% exemption certificates under Section 153(4), relief from double taxation on intercorporate dividends, and abolishing tax on bonus shares.
In terms of sales tax, OICCI suggested reducing the standard rate on goods to 17%, with a further 1% annual reduction to 15%, and harmonizing provincial tax rates. It also proposed declaring petroleum products as taxable, allowing input tax adjustments, and reducing sales tax on packaged milk to 5% to promote dairy sector growth and affordability.
The Chamber called for the restoration of zero-rating for local supplies under Export Facilitation Schemes and reduction of Federal Excise Duty (FED) on aerated waters to 18% and juices to 15%.
OICCI emphasized that all sectors—including trade, agriculture, and services—should contribute fairly to FBR revenues. It recommended phasing out FATA/PATA tax exemptions over three years, enforcing Track & Trace systems, and penalizing illicit tobacco trade, which costs the economy over Rs 300 billion annually.
Additional proposals include the monthly disclosure of tax refunds, with Rs 120 billion in pending refunds claimed by OICCI members. It also pushed for publishing import data, demonetizing Rs 5,000 notes, and digitizing tax return systems for better transparency.
To boost corporatization, OICCI suggested a 10% tax credit for first-time listed companies and a 20% credit on incremental exports for five years. Further recommendations include tax incentives for sustainability and green energy, enhanced depreciation for local machinery, and support for locally sourced materials and strategic crops.
The Chamber also urged the government to remove the 10% surcharge on high-income individuals, raise the taxable income threshold to Rs 1.2 million, and mandate filing with a token tax of Rs 1,000 for incomes above Rs 600,000.
Finally, OICCI proposed an exemption from 1% CVT on foreign assets for returning expatriates and foreign professionals becoming residents.