ISLAMABAD: An economic policy and business development think tank has presented its proposed shadow budget for the fiscal year 2026-27, recommending wide-ranging tax reforms and measures aimed at reducing the cost of doing business in Pakistan.
The shadow budget was issued with the support of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and released under the signature of Ahmed Nawaz Sukhera.
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The proposals call for reducing the corporate tax rate from 29 per cent to 25 per cent and abolishing super tax for all businesses except banks. The document also recommends eliminating withholding tax on inter-corporate dividends to encourage investment and business expansion.
The think tank urged the government to lower the financial burden on the salaried class by reducing the maximum income tax rate from 35 per cent to 20 per cent. It further proposed that individuals earning up to Rs800,000 annually should be exempted from income tax.
In its recommendations, the organisation also called for simplifying the tax structure by reducing withholding tax categories from 52 to 32. It proposed gradually cutting the general sales tax rate from 18 per cent to 15 per cent over the next three years.
The shadow budget additionally suggested abolishing the non-filer category while expanding the tax net to include retailers, vendors and merchants.
For the real estate sector, the document proposed reducing tax rates from 5.5 per cent to a uniform rate of 0.5 per cent. It also emphasized the immediate payment of pending tax refunds and urged authorities to resolve tax-related court cases worth Rs5.7 trillion without delay.
The think tank also introduced a one-page income tax return form aimed at simplifying filing procedures for taxpayers.
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Among institutional reform proposals, the document recommended restructuring the Federal Board of Revenue and appointing a qualified and accountable chairman for a fixed three-year term. It also proposed establishing separate boards for customs and income tax operations while increasing private sector representation within the FBR structure.
Economic experts say the proposals reflect growing calls from the business community for tax simplification, institutional reforms and measures to stimulate economic activity.