A Summary of PBF 2025–26 Recommendations
On the Federal Budget 2025-26, the Pakistan Business Forum (PBF) has proposed several policies in key sectors.
These concepts aim to increase regional equity in development, minimise corporate costs, boost industrial growth, and broaden the tax base. The leading suggestions are:
Increasing the tax base to boost domestic manufacturing competitiveness Supporting economic growth, industrialisation, and employment Enhancing competitiveness through mergers and acquisitions
Lowering Pakistan\'s Business Operating Costs
Focusing on SME Development, Traders Fixed Taxes, and Southern Balochistan\'s Growth
Key Tax Recommendations
Reduction in Tax Slabs and Removal of Discriminatory Taxation
The Pakistan Business Forum (PBF) recommends reducing the advance tax slabs for filers. They also object to the different taxes imposed on imported cotton compared to native cotton.
The Forum supports the immediate abolition of the 18% sales tax on domestic cotton so that it is taxed at the same rate as imported cotton.
Pakistani Mining and Green Sector Tax Exemption
The PBF proposes a seven-year tax exemption for Green Pakistan Initiative lease companies and SIFC mining companies to attract investment.
To promote industrial growth, the Forum recommends reducing the minimum tax rate annually to 0.25 per cent.
Support for the Construction Sector
The PBF also advocates creating industry financial benchmarks. Section 7E of the Income Tax Ordinance has been abolished, and first-time homebuyers are now subject to a 1% withholding tax.
Proposals for Business and Tax Reforms
Tax Regulation and Corporate Taxation Amendments
The PBF has modified section 8B to facilitate easier exportation for producers. They also suggest that the super tax should be reevaluated and the corporate income tax increased to 25% so that businesses are treated fairly and can compete effectively.
The Forum has also recommended a flat tax for merchants and suggested changes to Section 10 and Rule 34 to simplify the tax payment process for individuals. Big shops will pay Rs. 20,000 in taxes every month, while small sellers will pay Rs. 10,000.
Combating Smuggling and Raising Revenue
The Pakistan Business Forum (PBF) also stated that provincial governments should be encouraged to combat smuggling, as not paying taxes does not significantly impact provincial income. They say that provinces should raid stores that sell illegal goods to protect the business and revenue base.
Regional Development Initiatives
Funding for Southern Balochistan
The PBF seeks funding to improve towns in southern Balochistan. In November 2020, the Imran Khan government set aside Rs 540 billion to improve the area. The Forum suggests that the last 50% of that amount be allocated to support this project.
Tax Simplification and Wealth Creation
The PBF seeks tax policies that are clear, reliable, and beneficial to business. The Forum emphasises that taxes should promote fair wealth distribution and not hinder key sectors of the economy.
They argue that taxes on companies that manufacture goods and import products should be compared to taxes on other types of companies.
Economic Issues and Structural Change
In light of Pakistan\'s economic crisis, exacerbated by rising energy costs and a depreciating currency, the PBF advocates for fundamental changes. Some ways to achieve this are to raise taxes, cut government spending, and reduce assistance to low-income individuals.
Focus on Exports and Domestic Manufacturing
The PBF aims for the economy to improve sustainably, with exports, local manufacturing, and a robust agricultural sector driving the recovery. They support policies that protect industrial and formal service jobs, encouraging long-term economic growth.
Conclusion
The PBF\'s suggestions for the Federal Budget 2025–26 focus on tax reform, economic growth, and enhancing the country\'s competitiveness. The plans aim to strengthen manufacturing, investment, and equitable development in Pakistan, with a focus on underdeveloped areas, such as Southern Balochistan.
The PBF believes that these steps can help the country heal more sustainably and inclusively, benefiting everyone.