OICCI submits tax proposals for FY 2025–26

May 15, 2025 (MLN): The Overseas Investors Chamber of Commerce and Industry (OICCI) has submitted its comprehensive Taxation Proposals for the upcoming Fiscal Budget 2025–26, focusing on reforms to foster sustainable growth, attract investment, and expand the tax base in Pakistan.

The OICCI has welcomed the government’s landmark move to establish a Tax Policy Board (TPB) under the Ministry of Finance, separating policy formulation from tax administration.

This long-standing recommendation by the chamber is viewed as a critical step toward creating a more transparent and predictable tax framework.

Among its major proposals, OICCI recommends gradually reducing the corporate tax rate from 28% to 25% and phasing out the Super Tax over three years to improve business competitiveness.

The chamber also proposes restoring relief on intercorporate dividends, removing tax on bonus shares, and reducing the minimum turnover tax for low-margin sectors.

To address consumer and industry challenges, the chamber has suggested reducing the sales tax rate on goods from 18% to 15% over a phased timeline and restoring the zero-rated regime for pharmaceuticals.

It has also called for eliminating the 5% regulatory duty on telecom power equipment and exempting 5G infrastructure from taxes.

On broadening the tax base, OICCI emphasizes leveraging technology and data to ensure all sectors including agriculture, wholesale and retail trade, and real estate contribute proportionately to national revenues.

It also urges stricter enforcement against illicit trade, especially in the tobacco sector, which it estimates causes over Rs300 billion in losses annually.

Further recommendations include increasing the taxable income threshold for individuals to Rs1.2 million, abolishing the 10% surcharge on high earners, restoring tax credits for mutual fund investments, and providing specific relief for expatriate Pakistanis.

OICCI also supports introducing tax incentives for sustainability efforts, promoting local manufacturing, and enhancing exports through tax credits for incremental foreign sales.

As the largest private sector tax contributor in the country, OICCI affirms its commitment to collaborating with the government to ensure a fair, transparent, and growth-oriented taxation environment.

With over 200 member companies contributing more than one-third of the country’s tax revenues and investing $23bn over the past decade, the chamber continues to play a vital role in shaping Pakistan’s economic future.

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