ISLAMABAD: The Federal Board of Revenue (FBR) has reduced the tax rate applicable to exporters from 2 per cent to 1.25 per cent, while the government has provided a broader tax relief package worth Rs361 billion during the current year.
FBR officials shared the details at a meeting of the Senate Standing Committee on Finance’s subcommittee, chaired by PPP Senator Talha Mahmood.
The officials said the reduction in the exporters’ tax rate was part of the government’s efforts to ease the burden on businesses and encourage investment. They added that the prime minister had approved Rs80 billion in tax relief for exporters.
Responding to concerns about high taxation and the possible departure of multinational companies from Pakistan, FBR representatives said current tax rates were not expected to trigger an exodus of investment. They said the government intended to pursue further tax reductions in the coming years.
Officials also told the committee that businesspeople had not faced arrests or registration of FIRs during the year in connection with tax matters, while committees had been established to address concerns raised by the business community.
The FBR said taxpayers could avoid audit proceedings by paying their due taxes and that filers had also been given the facility to review and revise their tax returns.
According to officials, Pakistan increased taxes following the economic crisis that emerged in 2022, while certain foreign exchange restrictions were also introduced during that period. The authorities said measures had subsequently been taken to stabilise the situation.
The briefing highlighted several tax-related measures introduced in recent years. Officials said taxes on salaried individuals had been reduced, while the government had recently abolished or lowered the super tax, providing around Rs55 billion in relief under that head.
The tax rate for non-banking companies currently stands at 29 per cent, while a faceless tax assessment system has also been introduced this year to improve transparency and reduce direct interaction between taxpayers and tax officials.
During the meeting, Senator Talha Mahmood expressed displeasure over the absence of the finance secretary. He said he would seek to move a privilege motion over the official’s non-attendance and would also raise the matter with the prime minister.
Mahmood said reforms were needed within the FBR and called for improvements in the country’s tax policy and administration.
