Pakistan’s leading foreign investor group has criticised the government’s 2025–26 budget for falling short of meaningful tax reforms that could boost investment and address structural imbalances in the economy.
The Overseas Investors Chamber of Commerce and Industry (OICCI), which represents over 200 of the country’s largest multinational companies, said in a statement on Tuesday that the budget failed to correct the “inequitable corporate tax rate”. While it acknowledged a slight reduction in the Super Tax, it called for a broader overhaul of the tax framework to make Pakistan more competitive.
Finance Minister Muhammad Aurangzeb unveiled the new budget earlier in the day, setting a growth target of 4.2 per cent for the next fiscal year, up from an estimated 2.7 per cent in the current year.
The OICCI flagged the lack of serious cuts in government spending and criticised the absence of a clear plan to document the informal economy, which is estimated to be worth around Rs9 trillion. It said this was a missed opportunity to widen the tax base and improve revenue collection.
Although the chamber welcomed measures such as simplified tax filing for salaried individuals and small businesses, the expansion of e-invoicing, and the rollout of point-of-sale systems, it warned that the success of these reforms depends heavily on consistent and transparent implementation.
OICCI also backed the increase in the personal income tax exemption threshold from Rs0.6 million to Rs1.2 million and the lower rate for salaried workers. However, it said the relief remains insufficient to stem the country’s growing brain drain.
The group endorsed the government’s steps to phase out tax exemptions in FATA and PATA and to penalise non-filers more strictly, calling them important for improving compliance. Still, it stressed the need to reduce the overall corporate tax burden to make Pakistan a more attractive destination for investment.
