New Delhi, May 10: Ahead of the 2026-27 budget, industries in Pakistan are intensifying their call for structural tax reforms. They argue that the country cannot rely on short-term tax fixes. Significant tax reforms are essential to boost investor confidence and stimulate economic growth, according to a recent report.
The Business Recorder reports that the Overseas Investors Chamber of Commerce and Industry (OICCI), one of the leading industry bodies, has submitted a new proposal to the government regarding tax reforms. This proposal includes expanding the tax base and enhancing digitization efforts.
This demand arises at a time when Pakistan is grappling with substantial fiscal pressures, slowing investments, and declining industrial competitiveness.
Some business groups contend that previous governments prioritized short-term revenue collection over long-term economic restructuring, leaving critical weaknesses in the tax system unresolved.
According to the proposals presented by the OICCI, repeatedly imposing higher taxes on already formal sectors will not lead to tax growth. Instead, the chamber advocates for broadening the tax base, simplifying compliance processes, and integrating taxation with the country’s growing digital economy.
The OICCI represents over 196 foreign-invested companies from more than 30 countries, with total investments in Pakistan exceeding $209 billion. Member companies also make significant contributions to the government’s tax revenue.
Stakeholders in the business community have highlighted that Pakistan has one of the weakest regional tax bases. Registered businesses are facing increased compliance costs and regulatory burdens.
They argue that this imbalance has created an environment where tax compliance often proves detrimental compared to operating informally.
The report suggests that the proposals recommend the widespread use of electronic payments, e-invoicing, transaction traceability, and data-linked compliance systems to reduce unregistered economic activities.
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