Govt committed to reducing tax burden: Kiyani

LAHORE: Minister of State for Finance, Revenue and Railways Bilal Azhar Kiyani has said that the government has introduced major tax relief measures and structural reforms to reduce the burden on businesses, exporters, salaried persons and small traders, while efforts are underway to transform the Federal Board of Revenue (FBR) into a more transparent, facilitation-oriented and technology-driven institution. Speaking at the Lahore Chamber of Commerce and Industry (LCCI) on Saturday, the minister said super tax had been completely abolished for exporters and businesses with annual income between Rs150 million and Rs500 million, while the rate for companies earning more than Rs500 million had been reduced from 10 percent to 8 percent. He said the tax deduction on export proceeds had also been reduced from 2 percent to 1. 25 percent. Kiyani said the government was introducing a new Tax Operating Model featuring centralised and faceless audit and assessment mechanisms to minimise individual discretion, harassment and the possibility of collusion. READ ALSO: Broaden the base or burden the few He said the government believed the private sector must have a meaningful role in policymaking, adding that the prime minister had consistently directed the government to strengthen engagement with chambers and business organisations. Ahead of the federal budget, representatives of chambers had been invited to directly present their proposals so that the government could understand the problems faced by the business community and incorporate practical recommendations into policymaking, he added. The minister said exporters had also been provided relief through a reduction in tax deducted on export proceeds. Previously, exporters faced a combined deduction of 2 percent, comprising 1 percent advance income tax and 1 percent minimum tax, which had now been reduced to 1. 25 percent. The government was also working to make the relationship between exporters and the FBR more efficient and facilitation-oriented. On the prime minister’s instructions, dedicated FBR facilitation structures had been established in major export hubs, including Karachi, Faisalabad, Lahore and Sialkot, while Multan, Hyderabad and other areas were also being brought into the system. Exporters had been included in these committees so that their concerns could be addressed directly and promptly, he added. Talking about the Export Development Fund, Kiyani said its board had been reconstituted under the government’s oversight, with an exporter appointed as chairman and leading exporters and relevant sector representatives included on the board. The objective was to give the private sector a stronger role in decisions concerning export development, he added. The minister said customs reforms, including the Faceless System, were being introduced to eliminate direct interaction between appraisers and importers and reduce the possibility of collusion. Similarly, a new Tax Operating Model was being introduced under which audit and assessment processes would be centralised and faceless instead of being handled directly at the Regional Tax Office (RTO) level. He explained that audit and assessment orders would be generated through a centralised, CRM-driven system using taxpayers’ returns and other relevant information, along with predefined parameters. This, he claimed, would reduce unnecessary discretion and the possibility of harassment or collusion. He assured the business community that the government would remain in consultation with chambers to identify and resolve practical difficulties arising during implementation. Speaking about salaried persons, Kiyani said the government had also provided significant relief by abolishing the surcharge/super tax applicable to the salaried class and reducing tax rates across almost all income slabs. Turning to small traders and shopkeepers, the minister said the government had developed a new simplified tax scheme after extensive consultations with representatives of the business community, including Ajmal Baloch and Kashif Chaudhry. The government, he explained, had examined shortcomings in previous schemes and worked with traders to design a simpler and more practical mechanism. One of the major advantages of the scheme was that participating shopkeepers would generally not be subjected to routine audits merely because of differences relating to previous years, he said but pointed out that an audit could still be conducted in cases involving clear and unusual discrepancies identified through the FBR’s CRM or third-party information. He said participating shopkeepers would also receive a physical FBR plate to be displayed outside their shops. The objective was to prevent routine visits by FBR officials for unnecessary inquiries and provide greater protection against harassment. He further said traders covered under the scheme would not be required to become withholding agents and would not be subject to the point-of-sale (POS) machine requirement. An estimated 600, 000 to 700, 000 shopkeepers with commercial electricity meters were already filers, he said, while expressing appreciation for the role played by the business community in supporting efforts to broaden the tax base. Welcoming the minister, LCCI President Faheem Ur Rehman Saigol said Pakistan’s economy had witnessed some encouraging developments, including remittances reaching USD41. 6 billion and Moody’s upgrading Pakistan’s credit rating from CAA1 to B3. He, however, stressed that taxation, the cost of doing business and energy tariffs remained major challenges. He particularly highlighted high electricity tariffs, enforcement actions by different government agencies, issues involving the Lahore Development Authority (LDA), Ravi Urban Development Authority (RUDA) and Environmental Protection Agency (EPA), and the rapid conversion of agricultural land into housing schemes. He said the government must protect the country’s productive agricultural land and broaden the tax base. Saigol also expressed concern over the proposed relocation of 8, 000 to 10, 000 industries, saying Pakistan lacked the industrial zones and infrastructure required to relocate even a fraction of these units within a short period. The LCCI chief urged the government to adopt a practical and consultative approach to industrial relocation and provide relief to SMEs and existing industries. Copyright Business Recorder, 2026

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