KARACHI: The business community has submitted key proposals to the government for the upcoming Budget 2026-27, calling for major tax reforms, lower import duties and incentives for exports, agriculture, dairy, IT and emerging technologies.
As the government prepares the budget for the new fiscal year 2026-27, the business community has presented a wide-ranging set of recommendations.
The proposals focus on expanding the tax net, reducing the burden on businesses and promoting investment in key sectors of the economy. Among the major demands are the abolition of super tax and a gradual reduction in corporate tax.
Fixed tax proposed for shopkeepers
To increase the tax net, the business community has recommended imposing a fixed tax of Rs10,000 per month on shopkeepers and traders. It has also been proposed that this fixed tax should be collected through electricity bills.
According to the business community, this measure could help document retail activity and bring more traders into the formal tax system.
Super tax and corporate tax reforms
The business community has demanded that the government abolish super tax in the upcoming budget. It has also recommended a gradual reduction in corporate tax to encourage business growth, investment and formal sector expansion.
The proposals suggest that reducing tax pressure on companies could help improve economic activity and job creation.
Auto sector proposals include lower duty
For the auto sector, the business community has proposed abolishing sales tax on auto parts. It has also recommended reducing import duty from 35% to 10%.
Another proposal seeks to increase the age limit for used vehicles from three years to five years.
The business community has also recommended increasing the vehicle financing limit from Rs3 million or making it open-ended. At the same time, it has proposed that non-filers should not be allowed to own more than three vehicles.
Textile sector seeks export incentives
For the textile sector, the business community has recommended a 10% export rebate on value-added garments. It has also proposed a 50% subsidy on environment-friendly machinery to support modernization and sustainable production.
To increase textile exports, the business community has demanded the abolition of GST on local cotton seed.
The business community has demanded a seven-year tax exemption to promote corporate farming. According to the document, the proposals also include abolishing the additional 5.5% tax on the dairy sector.
The business community has further called for withdrawing the additional tax imposed for registering a business. It has also demanded a reduction in taxes on milk, formula milk and other dairy products.
Under the Brand Pakistan initiative, the business community has proposed duty-free access to Asian markets. It has also suggested expanding duty-free access alongside Europe, ASEAN and Turkey.
The proposal aims to support Pakistani exports and improve the country’s access to major regional and global markets.
IT startups may get tax exemption until 2030
The business community has recommended tax exemptions for IT and software startups until 2030.
Earlier proposals also called for a five-year tax exemption for IT and software startups to promote the digital economy. The recommendations are aimed at encouraging innovation, entrepreneurship and investment in Pakistan’s technology sector.
The business community has also proposed grants of up to Rs20 million for projects in artificial intelligence and blockchain. The proposal is designed to support emerging technologies and help Pakistani startups compete in the global digital economy.
If adopted, these measures could strengthen Pakistan’s innovation ecosystem and create new opportunities for young entrepreneurs.
