Islamabad: Leading corporate bodies of Pakistan have urged the International Monetary Fund (IMF) to help abolish the super tax, reduce corporate tax in a phased manner, and rationalize advance and withholding taxes to ease the burden on compliant businesses and revive economic growth.
The demands were made during separate meetings between the visiting IMF review mission and representatives of the Overseas Investors Chamber of Commerce & Industry (OICCI) and the Pakistan Business Council (PBC), which collectively represent over 300 multinational and local corporate giants.
Corporate Sector Flags Heavy Tax Burden
Both OICCI and PBC highlighted that documented and compliant sectors are disproportionately burdened, while tax-evading segments remain largely outside the net. This imbalance, they warned, is hurting competitiveness, discouraging investment, and making formal business operations increasingly unviable.
The corporate bodies stressed the urgent need for tax rationalization, broader tax base expansion, and stronger enforcement to bring undocumented sectors into the formal economy.
PBC Presents Five Key Economic Reforms
The Pakistan Business Council presented five major reform proposals to the IMF mission aimed at stabilizing and revitalizing Pakistan’s struggling economy. These included:
• Immediate reduction in corporate and sales tax rates
• Complete abolition of super tax in all forms
• Removal of inter-corporate dividend tax on associates and subsidiaries
• Elimination of withholding tax on exports
• Reduction in industrial energy tariffs
PBC also urged the government to factor in future cost reductions from power sector debt repayments and rising capacity utilization to ensure sustainable energy pricing for industries.
High-Level Engagement with IMF Mission
According to a statement, a PBC delegation led by Chairperson Dr Zeelaf Munir met with the IMF mission headed by Iva Petrova, Head of Mission to Pakistan, along with Mahir Binici, IMF Resident Representative.
The meeting focused on Pakistan’s transition from macroeconomic stabilization to long-term, export-led growth. While acknowledging recent stabilization indicators — including a policy rate of 10.5% and a primary fiscal surplus — the delegation stressed that the next phase must prioritize investment, productivity, and job creation.
Call for Structural Reforms and Policy Stability
Tax reform was a central theme of the discussion. PBC called for a phased reduction of corporate tax to 25%, rationalization of advance and withholding tax regimes that act as de facto minimum taxes, and broadening of the tax base instead of deepening it.
The delegation also emphasized the importance of policy consistency, warning that frequent regulatory shifts undermine investor confidence and long-term planning.
Energy Competitiveness and Industrial Growth
Energy pricing also featured prominently in the discussions. PBC highlighted that high and volatile industrial electricity tariffs, along with structural distortions in agriculture and food value chains, are hindering value addition and export diversification.
The council urged that fiscal space achieved through economic stabilization should be redirected toward productivity-enhancing and employment-generating industries to ensure inclusive and sustainable growth.