Business leader cautions budget strategy may burden compliant sectors unless tax base is broadened and industrial reforms are introduced
KARACHI, June 13, 2026: Khurram Ijaz, General Secretary of the Businessmen Panel Progressive (BMPP) and former Vice President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), has expressed concerns over the Federal Board of Revenue’s (FBR) ambitious tax collection target of Rs15.26 trillion for fiscal year 2026-27.
He warned that the aggressive revenue target could increase pressure on already documented and compliant sectors instead of broadening the tax base.
According to the Federal Budget 2026-27, the government has set the FBR a revenue collection target that is more than 17 percent higher than the revised estimate of Rs12.98 trillion for the outgoing fiscal year 2025-26.
Concerns over repeated shortfalls
Khurram Ijaz noted that the FBR had already missed its original target of Rs14.13 trillion in FY2025-26, prompting a downward revision.
He questioned how the authority plans to generate an additional Rs2.29 trillion in the next fiscal year without further burdening existing taxpayers.
“If this objective is pursued through additional tax measures and aggressive enforcement, it will further squeeze the already compliant taxpayer base rather than expand it,” he said.
Calls for industrial competitiveness and export reforms
While acknowledging certain positive measures in the budget, Ijaz said the proposals fall short of addressing structural issues faced by Pakistan’s manufacturing and export sectors.
He said the industry requires stronger reforms to restore competitiveness and improve capacity utilisation, noting that incremental changes were insufficient.
He welcomed the reduction in export withholding tax from 2 percent to 1.5 percent and the reduction in Super Tax rates, including its abolition for companies earning profits up to Rs500 million. However, he described these steps as only partial relief.
Export taxation and refund concerns
Ijaz criticised the decision not to restore the Final Tax Regime (FTR) for exporters, calling it a long-standing demand of the business community.
He said converting withholding tax into a minimum tax keeps exporters within the normal tax regime, increasing compliance costs and reducing ease of doing business.
He also highlighted the unresolved issue of delayed GST and income tax refunds, saying billions of rupees remain stuck with the FBR, creating liquidity challenges for exporters and manufacturers.
Energy costs and industrial slowdown
The business leader further pointed to high electricity and gas tariffs as a major obstacle to industrial growth.
He said the absence of a clear roadmap for reducing energy costs or addressing circular debt continues to hurt productive sectors.
“Industries across Pakistan are operating below capacity, and export-led growth is essential for economic stability,” he said.
Need to broaden tax base
Ijaz stressed that the government continues to rely heavily on existing taxpayers instead of expanding the tax net.
He said Pakistan’s long-term economic stability depends on export growth, industrial expansion, and a competitive business environment.
Concluding his remarks, he said that while some positive steps have been taken, the budget lacks a comprehensive strategy for export promotion, industrial revival, energy reforms and improving the ease of doing business.
