Pakistan’s Industrial Policy Committees have called for a reduction in corporate taxes, reforms to the super tax regime, and a fast-track 72-hour sales tax refund process to stimulate investment and enhance exports.
The recommendations were put forward in a meeting chaired by Special Assistant to the Prime Minister (SAPM) on Industries and Production Haroon Akhtar Khan. PM’s Coordinator Rana Ehsan Afzal, FBR representatives, and other key stakeholders participated in the discussions.
A central proposal involves reducing the corporate income tax rate from 29% to 26% over three years. Haroon Akhtar noted that Pakistan’s tax rate is higher than many regional competitors, such as Vietnam’s 17%, and argued that lowering the rate would help improve competitiveness and economic performance.
The committees also urged changes to the super tax framework—suggesting it be levied only on incremental income instead of total profits. They proposed gradually bringing it down to 5% within five years, with the option of abolishing it in the sixth year if fiscal conditions allow.
On the export front, the panels recommended introducing a fresh Drawback of Local Taxes and Levies (DLTL) scheme and ensuring refund payments are made within 72 hours through a dedicated monitoring mechanism. Other proposals included removing cross-subsidies in industrial electricity tariffs, eliminating advance taxes on exporters, and simplifying banking procedures to make export financing more accessible—ideally at rates 500 basis points below the policy rate.
Haroon Akhtar reaffirmed the government’s focus on export-led growth, echoing Prime Minister Shehbaz Sharif’s instructions to make exports a national economic priority. He acknowledged that high financing costs, expensive energy, and heavy taxes remain significant hurdles, but stressed that well-targeted reforms could make Pakistani industries globally competitive and ensure long-term progress.