ISLAMABAD: In a significant push for economic reform, Pakistan’s leading business groups have presented a unified demand to the International Monetary Fund (IMF) to abolish the super tax and slash corporate tax rates. The appeal was made during meetings with a visiting IMF review mission, which is assessing the country’s economic program.
A Unified Call for Tax Rationalization
Separate delegations from the Overseas Investors Chamber of Commerce & Industry (OICCI), representing over 200 multinational companies, and the Pakistan Business Council (PBC), a body of 110 major local and foreign firms, met with IMF officials. Both groups argued that the current tax structure unfairly burdens compliant companies while tax-evading sectors operate with impunity, making formal business increasingly unviable.
The PBC, led by Chairperson Dr. Zeelaf Munir, presented a five-point plan to the mission headed by Iva Petrova. The core recommendations include:
- Immediate abolition of the super tax in all its forms.
- A phased reduction of the corporate tax rate to 25%.
- Rationalization of advance and withholding tax regimes, which currently act as de facto minimum taxes.
- Elimination of inter-corporate dividend tax on associates and subsidiaries.
- Removal of withholding tax on exports.
Broaden the Base, Don’t Deepen It
The business councils emphasized that Pakistan’s tax policy must shift from deepening the burden on existing taxpayers to broadening the net. They called for stronger enforcement mechanisms to bring untaxed and informal segments of the economy into the documented system. The discussion also stressed the critical need for long-term policy consistency to unlock private sector confidence and investment.
“Stabilisation must now translate into investment, productivity and employment generation,” noted the PBC in a statement. With the policy rate at 10.5% and a primary surplus achieved, the focus must shift to structural measures for sustainable, export-led growth.
Energy Costs and Competitive Distortions
Beyond taxation, the PBC highlighted energy competitiveness as a major impediment to growth. It called for an immediate reduction in industrial energy tariffs, arguing that high and volatile costs, along with sectoral distortions in agriculture, stifle value addition and export diversification.
The council urged that fiscal space created through economic stabilisation should be redirected to support productivity-enhancing and job-creating industries, moving the economy from mere survival to sustainable expansion.
