The Federal Board of Revenue (FBR) has begun consultations with key stakeholders to shape proposals for the 2025β26 federal budget, focusing on phasing out tax exemptions, boosting revenue, and simplifying tax laws.
In a recent communication with business associations like the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), the Pakistan Business Council, and others, the FBR has called for suggestions regarding reforms in income tax, sales tax, and customs. These proposals, which are due by January 31, 2025, will contribute to the upcoming Finance Bill.
FBR’s key priorities include:
- Phasing Out Tax Exemptions: Gradually removing tax exemptions across various sectors to minimize revenue leakage.
- Expanding the Tax Base: Bringing more taxpayers into the system and addressing gaps in compliance.
- Supporting Local Industry: Proposing tariffs adjustments and reduced duties on raw materials to help domestic manufacturers.
- Ensuring Tax Fairness: Introducing measures to ensure equitable taxation and address sectoral disparities.
Additionally, FBR is seeking recommendations to simplify doing business, address tax anomalies, and improve transparency. Stakeholders are asked to submit their proposals in Word or Excel formats, along with estimates of the potential revenue impact and reasoning behind each suggestion.
FBR officials emphasized the importance of creating a balanced and inclusive budget that enhances the country’s tax-to-GDP ratio. They stressed the need for a pragmatic approach to tax reforms, which will support both business growth and fiscal responsibility.
The initiative aligns with the government’s aim to implement sustainable economic policies. By incorporating these consultations, the final budget draft will focus on increasing revenue, improving the business environment, and fostering taxpayer confidence.
In related news, Prime Minister Shehbaz Sharif affirmed Pakistan’s commitment to honoring its International Monetary Fund (IMF) obligations, but he also stressed that excessive taxation is unsustainable for the country’s economy. Speaking at the Pakistan Stock Exchange, he underlined plans for self-reliance and emphasized that while current IMF agreements are necessary, Pakistan aims to eventually move away from them.
The prime minister also highlighted Karachi’s role as the financial and export hub of Pakistan, noting that the city has seen significant growth. He expressed optimism for future economic initiatives, such as the “Uraan Pakistan” program, and stressed the importance of continued growth-driven reforms.
Earlier in the day, PM Shehbaz was welcomed in Karachi by Sindh Governor Kamran Tessori and Chief Minister Murad Ali Shah. He also visited key local institutions and met with business leaders to discuss ongoing and upcoming projects.
