KARACHI: The American Business Council of Pakistan (ABC) appreciates the Government’s efforts in presenting a forward-looking Federal Budget 2025-26, which includes encouraging steps to support industrial growth, streamline tariffs, promote digital enforcement, and foster an export-led economy.
Measures such as the rationalization of customs duties, removal of certain regulatory barriers, and enhanced digitalization to curb tax evasion reflect the Government’s commitment to facilitating business and improving economic efficiency.
ABC is also grateful to the Government of Pakistan for accommodating some of our proposals in the Budget 2025-26, which we believe will contribute to further stability in the economy and reinforce investor confidence.
While these initiatives are promising, ABC believes that certain aspects of the budget may merit further review to fully unlock Pakistan’s investment potential. The increase in withholding taxes on services, the introduction of new levies on digital transactions, and the phased withdrawal of incentives for renewable energy could create unintended cost pressures for businesses, particularly in emerging and sustainability-focused sectors.
Additionally, the proposed levy of Rs. 2.5 per litre on petrol and diesel will likely place an additional cost burden on both businesses and consumers, potentially fuelling inflation and increasing operational expenses.
Furthermore, while we acknowledge the tax relief extended to the salaried class, we feel that this relief is still limited and should be further enhanced to genuinely ease the financial burden on the working population. We also respectfully suggest that the reduction in super tax should be more substantial and applied across the corporate sector, rather than being restricted to businesses within a specific turnover range.
Broadening this relief would better support Pakistan’s ambition to encourage investment and growth across industries.
ABC remains committed to working alongside the Government of Pakistan to support policies that drive sustainable, inclusive economic development and foster a competitive business environment.
Copyright Business Recorder, 2025
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