Shehbaz Sharif on Wednesday called for reducing direct taxes across all sectors in the upcoming federal budget, emphasizing the need to support business, attract investment, and accelerate economic growth.
Read More: Pakistan Pushes for Tax Relief to Boost Growth
Speaking at the Pakistan Governance Forum 2026 in Islamabad, the prime minister said the government must shift its focus toward expanding production, exports, and foreign direct investment instead of relying heavily on taxation. He stressed that lowering direct taxes would encourage business activity and create a more favorable investment environment.
“I believe that in the upcoming budget, we must decrease direct taxes across the board so that businesspersons and investors are facilitated,” Sharif said. He added that his economic team was fully aligned on the need to reduce the tax burden to promote sustainable economic development.
براہِ راست: پاکستان گورننس فورم 2026 کے افتتاحی سیشن کی کارروائی اور وزیراعظم محمد شہباز شریف کا خطاب https://t.co/1lAHOEPAXE
— Government of Pakistan (@GovtofPakistan) February 25, 2026
The prime minister also raised concerns about the collection and reporting of indirect taxes. He noted that while businesses collect indirect taxes from consumers, failing to deposit those funds with the government undermines national interests. Without naming specific entities, he highlighted sectors such as sugar, cement, and tobacco, pointing out improvements in tax recovery. He said tax collection in the sugar sector increased by Rs36 billion in 2025 compared to the previous year, while the cement sector recorded an increase of Rs60 billion.
Sharif acknowledged that many industry leaders comply fully with tax regulations but warned that non-compliance by some creates unfair competition and harms the economy. He emphasized the importance of coordinated efforts between federal and provincial governments, along with national institutions, to ensure transparency and economic stability.
Read More: Overhauling tax system to boost revenue
He reaffirmed that the government’s role is to facilitate businesses by improving productivity, encouraging innovation, and supporting exports, rather than directly managing commercial enterprises. The prime minister urged swift action, stressing that economic recovery and long-term growth require strong commitment and collective effort.