Karachi, April 25, 2025 – The Karachi Chamber of Commerce and Industry (KCCI) has strongly urged the Federal Board of Revenue (FBR) to reinstate the previously available tax credit under Section 65B of the Income Tax Ordinance, 2001, in a bid to encourage industrial investment and economic growth.
In its budget proposals for the fiscal year 2025–26, KCCI emphasized that until Tax Year 2021, businesses were allowed a tax credit of 10% on the value of investment made in new plant and machinery. This incentive was available to industrial undertakings operating within Pakistan and could be adjusted against the company’s income tax liability. The KCCI noted that the removal of this provision had led to a sharp decline in industrial investments, adversely impacting the country’s economic momentum.
The chamber argued that withdrawing the tax credit has discouraged companies from expanding or upgrading their production infrastructure. This not only stifled industrial growth but also limited job creation, suppressed export potential, and curtailed the overall tax base. Without incentives, businesses are reluctant to invest in capital-intensive assets, especially in the current challenging economic climate.
The KCCI has now proposed that the tax credit under Section 65B be reinstated in the upcoming federal budget to restore investor confidence and drive the much-needed investment into manufacturing and industrial sectors. The chamber believes that reviving this facility will result in enhanced industrial output, greater employment opportunities, and increased exports — all of which would ultimately boost government revenue.
Furthermore, KCCI highlighted that providing such fiscal incentives aligns with the broader goal of documentation and formalization of the economy. As companies expand operations and acquire new machinery, they naturally become more integrated into the formal economic system, improving tax compliance.
Reviving the tax credit, according to KCCI, is not merely a concession — it’s a strategic step toward sustainable economic growth. The chamber is confident that this move will encourage businesses to reinvest in Pakistan’s industrial future, create long-term economic resilience, and contribute positively to national development.