Budget proposals submitted: Govt should reduce GST rate up to 15pc: UBG

KARACHI: President of the United Business Group (UBG), Zubair Tufail, in his recommendations submitted to the government for the Federal Budget 2026-27, stated that in order to strengthen economic confidence, attract investment, increase production, and expand business activities, the government should reduce the General Sales Tax (GST) rate from 18 percent to 15 percent. He further proposed that Pakistan’s GDP growth target should be raised to 8. 5 percent, while the maximum income tax rate on the salaried class should be reduced from 35 percent to 20 percen. Zubair Tufail said that UBG Patron-in-Chief S M Tanveer and FPCCI President Atif Ikram Sheikh have presented a comprehensive Shadow Budget, which recommends increasing Pakistan’s exports from USD 30 billion to USD 80 billion, expanding the tax base from 3 million taxpayers to 100 million people, and raising per capita income from USD 1, 900 to USD 2, 900. As head of the country’s largest business community group, he expressed his full support for the Shadow Budget proposals. He suggested that the government introduce a new fixed tax scheme for the retail sector in consultation with traders. He also emphasised that industries should be provided energy at competitive rates. A simple and transparent tax system, he said, would encourage fresh investment, promote the establishment of new industries, generate employment opportunities, and increase government revenues without the need for higher tax rates. Zubair Tufail urged the government to immediately restore the Final Tax Regime (FTR) for exporters and reinstate the Export Facilitation Scheme in its original form. He also called for making export financing facilities easier, cheaper, and more effective. Among his other recommendations were: Rationalisation of Customs duties to promote industrial development and local manufacturing, formulation of policies to ensure a uniform and fair business environment across the country, introduction of a National Industrial Policy, digital tax filing system, and faceless Customs clearance mechanism, providing relief to the salaried class and increasing the taxable income threshold, taking strict action against non-filers, launching digital applications to facilitate tax filing, reducing discretionary powers of tax officials, offering special incentives for key sectors including textiles, IT, and agriculture. He further urged the government to reduce the burden of heavy taxation in the Federal Budget 2026-27. He called for lowering levies on petroleum products and captive power plants so that Pakistani exporters can compete effectively with their counterparts in Asian markets. Zubair Tufail also proposed a special package for the development of small, medium, and cottage industries. He recommended reducing taxes imposed on gas and electricity tariffs to stimulate production activities. He advised the government to avoid imposing approximately Rs 500 billion in new taxes in the upcoming budget. According to him, the Super Tax has become a major obstacle to industrial growth and should be abolished in the new budget. He concluded by stating that in order to achieve the annual targets of the Federal Board of Revenue (FBR) and increase exports, Pakistan’s tax regime must be comprehensively restructured. Copyright Business Recorder, 2026

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