Karachi, April 20, 2025 — The Karachi Chamber of Commerce and Industry (KCCI) has strongly recommended the government to revive the Final Tax Regime (FTR) for the export sector in its budget proposals for the fiscal year 2025–26.
The Karachi Chamber emphasized that the previous shift from FTR to the Normal Tax Regime (NTR), as implemented through the Finance Act 2024, has led to considerable challenges for exporters.
According to the Karachi Chamber, moving away from the simplified FTR, which taxed exporters at a flat 1% of turnover, towards the more complex NTR structure — which includes a 29% tax on taxable profits — has significantly increased the compliance burden. Exporters now face heightened documentation requirements and procedural hurdles that are affecting their efficiency and profitability.
“The transition has disrupted the ease of doing business and introduced administrative bottlenecks. This has negatively impacted the transparency and global competitiveness of Pakistan’s export sector,” the Karachi Chamber stated.
The Karachi Chamber pointed out that the Federal Board of Revenue (FBR) lacks the audit capacity to manage the growing demands of NTR compliance. This, they argue, places an unnecessary strain on both the business community and the tax machinery. To address this, the Chamber strongly urged the government to reconsider its policy and reintroduce the FTR specifically for export-oriented industries.
In its formal proposal, the Karachi Chamber laid out two main objectives for reinstating FTR:
1. To simplify the taxation process and reduce exporters’ reliance on cumbersome FBR audits, especially given the board’s limited resources.
2. To enhance the overall ease of doing business, encouraging more firms to operate within the formal economy while supporting the growth of Pakistan’s vital export sector.
With Karachi being the economic hub of Pakistan, the Karachi Chamber’s recommendations hold substantial weight. Many industry leaders are hopeful that the government will consider this practical step toward fostering a more business-friendly tax environment through the revival of FTR.