Oil refineries: SIFC to ensure removal of major tax distortion

ISLAMABAD: The Special Investment Facilitation Council (SIFC) will ensure the removal of a major tax distortion for the oil refineries in the upcoming budget (2026-27).

This was stated by Sajid Mahmood Qazi, Additional Secretary SIFC, during the question-and-answer session held at the CFO Conference 2026 organized by the Institute of Chartered Accountants of Pakistan (ICAP).

He admitted that in terms of investment Pakistan is a challenging destination. The investors are facing some key issues, like energy pricing, which are roadblocks to investment.

According to him, there is a need for consistency of policies, particularly tax policies in Pakistan.

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The investors and businesses should have the opportunity to follow one consistent policy for making investments and setting up their businesses for expansion, upgradation, etc. The policy should not be changed by the government.

One example is the tax issues in the upgradation of oil refineries. The government has drafted a proposal to address sales tax hurdles and other operational challenges regarding the Brownfield Refinery Upgradation Policy. Due to a change in tax law, the industry was choked.

After negotiations with the Federal Board of Revenue (FBR), the Ministry of Finance, and the Petroleum Division, the sales tax issue would be resolved in the coming budget (2026-27). Subsequently, oil refineries will accelerate the process of the Brownfield Upgradation Refinery Policy.

He referred to energy pricing, which remained a major challenge for the investors in the country. There are still a few issues that are roadblocks for the local investors.

Additional Secretary SIFC said that the salute to the business community of the country, which has shown remarkable performance despite facing issues like taxation, energy, and discount rates.

Several new IPOs (Initial Public Offerings) have been received in the market, which has given a positive signal among the investors. The new IPOs were welcomed in the market, he said.

“Despite all roadblocks, the business community is doing a remarkable job”, Sajid Mahmood Qazi said.

Ashfaq Tola, former minister of state and a leading chartered accountant, talked about structural changes needed for attracting investment in the country. We should have a home-grown recipe for attracting investment instead of copying foreign policies.

He said that the government has taken 23 IMF programs, and we are getting ready for the 24th. What changes have been made in government policies after taking 23 programs, he questioned.

However, despite all efforts, the governments remained unable to tax the agriculture sector, shopkeepers/retailers, and exporters, he added.

During the panel discussion, an economist, Haroon Sharif, stated that foreign investors would be attracted when local investors do expansion, upgradation, and add new investment. He said that Pakistan has geopolitical risks, which are hampering foreign investment in the country.

Copyright Business Recorder, 2026