The Pakistani government has decided to stop giving tax exemptions to new Special Economic Zones (SEZs). This step is part of ongoing reforms under the International Monetary Fund (IMF) program. Finance Minister Muhammad Aurangzeb told the National Assembly’s Finance Committee that the exemptions were not giving the expected economic results. He explained that the existing SEZs were not performing as well as planned.
Federal Board of Revenue (FBR) Chairman Rashid Langrial confirmed that the tax breaks for new SEZs will no longer be available. Although the IMF wanted all exemptions gone by 2027, the government successfully negotiated more time. Now, existing SEZs will enjoy tax holidays only until 2035. This decision is expected to help the government improve its weak tax system.
Many lawmakers raised concerns over this change. They feared it might hurt investment in the country, both local and foreign. Some members even warned that investors may stop putting money into SEZs. But the committee eventually agreed, understanding that this was a key demand from the IMF for future economic support.
In another move, the committee approved a change affecting Non-Profit Organizations (NPOs). Now, all NPOs will face the same rules to get full tax credit. This will remove the difference between Table-I and Table-II categories. According to the FBR, the aim is to prevent misuse and ensure only genuine organizations receive tax benefits.
These reforms mark a big shift in Pakistan’s tax policy. They reflect the country’s efforts to meet IMF benchmarks and strengthen its financial health. The government hopes these steps will create a more transparent and fair tax system over time.