Trade body urges government to ease compliance burden in budget 2026-27
Federation of Pakistan Chambers of Commerce and Industry has proposed the revival of the Final Tax Regime (FTR) for exporters in the upcoming budget 2026-27, arguing that the withdrawal of the regime has increased compliance costs and tax-related uncertainty for exporters.
In its budget proposals, the FPCCI said exporters of goods were facing higher documentation requirements, audit-related issues, and growing compliance burdens after the FTR was discontinued.
The apex trade body recommended reinstating the Final Tax Regime as a full and final tax liability for exporters to simplify taxation and reduce administrative hurdles.
It also proposed allowing exporters to choose between the Final Tax Regime and the Normal Tax Regime according to their business needs.
According to FPCCI, the proposal has support from several business organizations and industry groups, including the All Pakistan Textile Mills Association, Faisalabad Chamber, Textile Processing Mills Association, Pakistan Readymade Garments Manufacturers and Exporters Association, towel manufacturers, and FPCCI’s advisory bodies.
Business leaders said restoring the FTR could help improve export competitiveness by reducing uncertainty surrounding tax assessments and audits.
The FPCCI also proposed extending tax incentives for Pakistan’s information technology sector.
The chamber noted that Pakistan’s IT exports currently stand at around $3.8 billion but have the potential to reach $10 billion in the coming years.
It recommended maintaining the existing 0.25% tax rate on IT and IT-enabled services exports until 2035 to ensure long-term policy consistency and encourage further investment in the sector.
The proposal has backing from Pakistan Software Houses Association, IT exporters, and FPCCI’s Policy Research and Budget Advisory Council.
The government is currently finalizing budget proposals for fiscal year 2026-27 ahead of the federal budget announcement expected next month.
Exporters and industry groups have been urging policymakers to introduce business-friendly tax measures to support economic growth, increase exports, and attract investment.