The Overseas Investors Chamber of Commerce and Industry (OICCI), which represents international investor companies operating in Pakistan, has proposed a series of reforms for the federal budget 2026-27 aimed at attracting foreign investment and improving the business environment.
The chamber also called for measures to address challenges faced by local industries and the commercial sector.
OICCI Seeks Lower Corporate Taxes
In its budget recommendations, OICCI placed corporate tax reforms at the center of its proposals.
The chamber urged the government to reduce the corporate tax rate to 28 percent in the fiscal year 2026-27. It also recommended a gradual reduction to 25 percent over the next three years to make Pakistan more competitive for foreign investors.
According to OICCI, lower tax rates would encourage investment and support economic growth.
Chamber Calls for Gradual End to Super Tax
OICCI also advocated the phased abolition of the super tax.
The chamber noted that when corporate tax, super tax, Workers Welfare Fund (WWF), and Workers Profit Participation Fund (WPPF) are combined, the effective tax burden on large companies reaches nearly 46 percent.
It argued that this level is significantly higher than those prevailing in many countries in the region and undermines competitiveness.
High Taxes on Banks Raising Cost of Capital
The chamber expressed concerns over the heavy taxation imposed on banks.
According to OICCI, higher taxes increase the cost of capital and affect the entire business and industrial sector.
It said the existing taxation system limits banks’ ability to provide financing, making working capital more expensive for businesses and reducing economic activity.
Reforms Proposed for Salaried Individuals
OICCI also recommended changes to personal income taxes to address the growing trend of highly skilled professionals leaving the country.
The chamber proposed abolishing the 10 percent surcharge and super tax imposed on high-income salaried individuals.
It further recommended setting the maximum income tax rate at 25 percent.
The chamber believes such measures would help retain qualified professionals and strengthen Pakistan’s human capital.
GST Reduction Recommended
On indirect taxes, OICCI suggested simplifying withholding taxes and reducing the General Sales Tax (GST) on goods.
The chamber proposed lowering the GST rate from 18 percent to 17 percent initially and eventually bringing it down to 15 percent.
According to OICCI, these measures would ease the tax burden on businesses and consumers and improve economic competitiveness.
Delayed Refunds and Tax Notices Remain Major Concerns
The chamber highlighted several issues that continue to hamper business activity.
It pointed to delays in tax refunds, unnecessary notices issued to large taxpayers, and weak coordination between federal and provincial revenue authorities.
OICCI said these challenges create uncertainty for investors and hinder ease of doing business in the country.
Focus on Investment and Business Growth
The recommendations form part of OICCI’s broader efforts to promote foreign direct investment and create a more business-friendly environment.
The chamber emphasized that reforms in taxation and regulatory processes are essential for increasing investment, supporting industries, and enhancing Pakistan’s economic competitiveness ahead of the upcoming fiscal year.