The Overseas Investors Chamber of Commerce and Industry (OICCI) has voiced its disappointment over the government’s limited efforts to reform the corporate tax structure in the recently announced budget. While the Chamber acknowledged a slight reduction in Super Tax rates, it stressed the urgent need for a more comprehensive overhaul to make Pakistan’s tax regime competitive and appealing to foreign investors.

OICCI also highlighted the lack of significant cuts in government expenditure, noting that fiscal discipline is essential for achieving macroeconomic stability. The Chamber urged the government to focus on rationalizing public spending to help close the budget deficit.

Another major concern raised was the missed opportunity to broaden the tax base. The Chamber expressed regret over the absence of a concrete plan to document Pakistan’s sizable Rs. 9 trillion informal cash economy, a step it has long advocated for meaningful revenue generation and economic formalization.

Despite these criticisms, OICCI welcomed several positive initiatives in the budget, including simplified tax return processes for salaried individuals and small businesses, nationwide implementation of e-invoicing, and expanded use of Point of Sale (POS) systems. However, the Chamber cautioned that these reforms would only be effective with proper and consistent implementation.

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The increase in the tax exemption threshold for salaried individuals—from Rs. 0.6 million to Rs. 1.2 million—and the reduction of their tax rate from 5% to 1% were seen as steps in the right direction. Nonetheless, OICCI believes these measures fall short of providing sufficient relief to help curb the ongoing brain drain.

The Chamber also noted the government’s move to gradually end tax exemptions in FATA and PATA, as well as tougher actions against non-compliant taxpayers, including curbs on asset transfers, property and vehicle purchases, and stronger penalties—measures it deemed essential for enhancing tax compliance.

While acknowledging these advances, OICCI emphasized that the budget lacks transformative policies for the corporate sector. It reiterated the importance of rationalizing tax slabs and reducing the overall tax burden to foster a more investment-friendly environment.