PBF submits recommendations on finance bill

KARACHI: The Pakistan Business Forum (PBF) has submitted a comprehensive set of recommendations on the Finance Bill to the Standing Committees on Finance of both the National Assembly and the Senate, urging lawmakers to introduce critical amendments aimed at promoting economic growth, strengthening the tax base, supporting agriculture, and enhancing exports competitiveness. In its recommendations, PBF has proposed that the tax rate for exporters be fixed at 12 percent, arguing that a predictable and competitive tax regime is essential for sustaining export growth and improving Pakistan’s position in international markets. The Forum has also called for the withdrawal of proposed amendments relating to the Active Taxpayers List (ATL) that impose stricter penalties on late filers. According to the Finance Bill, penalties for late filing of tax returns are proposed to increase significantly—from Rs. 1, 000 to Rs. 25, 000 for individuals, Rs. 10, 000 to Rs. 50, 000 for Associations of Persons (AOPs), and Rs. 10, 000 to Rs. 100, 000 for companies. PBF stated that such measures would discourage new taxpayers from entering the tax net and could undermine public confidence in the taxation system. Instead of imposing excessive penalties, the government should focus on facilitating voluntary compliance and broadening the tax base. Addressing challenges facing the agricultural and textile sectors, the Forum recommended reducing the General Sales Tax (GST) on locally produced cottonseed and oilcake to 8 percent. PBF President Khawaja Mehboob-ur-Rehman said the measure would support the revival of Pakistan’s cotton sector and help safeguard the country’s cotton ginning industry, which has been under severe pressure in recent years. To reduce Pakistan’s dependence on imported edible oil and encourage domestic oilseed cultivation, PBF has proposed the introduction of a fixed tax of Rs. 3 per kilogram. The Forum believes this policy would not only enhance tax revenues but also stimulate local edible oil production and strengthen agricultural self-sufficiency. The business community body further urged the government to abolish the Minimum Turnover Tax on companies through the Finance Bill, stating that the tax places an undue burden on businesses, particularly those operating under challenging economic conditions. To provide relief to the agricultural sector, PBF recommended reducing the tax rate on DAP and Potash fertilisers to 8 percent, emphasising that affordable agricultural inputs are essential for improving crop productivity and supporting farmers. The Forum also highlighted the liquidity challenges faced by farmers and proposed that agricultural financing be made available at a concessional rate of 4. 5 percent, similar to the rate offered under Export Refinance Scheme. According to PBF, access to low-cost financing would significantly improve agricultural output and strengthen rural economic activity. Furthermore, PBF called for the complete withdrawal of the 18 percent GST on dairy products, arguing that the tax has increased the financial burden on consumers at a time of rising inflation. It noted that many developing economies, including India, do not impose such taxes on dairy products and stressed that removing GST would provide much-needed relief to the public while encouraging growth in the dairy sector. It may be noted here that the business forum submission of these recommendations comes at a crucial time, as various sectors of the economy continue to urge lawmakers to revisit a number of proposed tax and revenue measures contained in the Finance Bill 2026-27. Stakeholders are looking to the parliamentary finance committees to consider amendments that could help strike a balance between revenue generation, economic growth, investment promotion, and public relief before the budget receives final approval. Copyright Business Recorder, 2026

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