US Companies Advocate Pakistan Tax Reforms in Budget 2024-25

US Companies Advocate Pakistan Tax Reforms in Budget 2024-25

Islamabad, April 5, 2024 – The American Business Council (ABC), representing US companies operating in Pakistan, has emphasized the need for tax reforms in the country through upcoming budget 2024-25 to bolster investor confidence and foster economic growth.

Speaking at the “Pre-Budget Proposal Seminar” organized by the Ministry of Commerce in Islamabad, Aisha Sarwari, a Board of Director member of the American Business Council of Pakistan, underscored the importance of restructuring tax policies to incentivize investment and broaden the tax base.

Sarwari highlighted the significance of taxing income based on profit rather than turnover, a move that is proposed to restore investor confidence and promote fair taxation practices. She emphasized that such reforms are crucial for attracting foreign investment and encouraging business expansion in Pakistan.

The American Business Council represents a diverse array of sectors within the economy, collectively contributing over US$600 billion in gross revenue. With more than 130,000 direct employees and over a million indirect employees in Pakistan, ABC members play a vital role in driving economic activity and employment generation in the country.

Recognizing the commercial impact of its members, the American Business Council actively engages with the Government of Pakistan to advocate for policies that facilitate trade and investment. Sarwari noted that ABC serves as an effective platform for dialogue, providing regular suggestions and input to relevant authorities to ensure that business concerns are addressed in the annual budget and trade policies.

In addressing challenges such as illicit trade and smuggling, Sarwari proposed measures to level the playing field for legitimate businesses. She urged the Ministry of Commerce to reconsider tariff structures to discourage smuggling activities and create a conducive environment for legal trade.

Additionally, Sarwari suggested imposing restrictions on the importation of brands by multinational corporations (MNCs) to prevent unauthorized imports, thereby safeguarding the interests of local businesses and promoting fair competition.

The recommendations put forth by the American Business Council aim to strike a balance between encouraging investment, broadening the tax base, and ensuring fairness within the tax system. These proposed reforms, if implemented, have the potential to enhance Pakistan’s attractiveness as an investment destination, increase government revenue, and improve the country’s business environment.

Established in 1984, the American Business Council of Pakistan serves as the voice of US businesses operating in the country. Affiliated with the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and the U.S. Chamber of Commerce (USCC), ABC fosters collaboration between its members, businesses, and government entities to drive economic growth and prosperity in Pakistan.