Pakistan Business Council urges tax overhaul in talks with IMF mission

A delegation of the Pakistan Business Council met with an International Monetary Fund mission in Islamabad to press for tax reforms and policy consistency, saying macroeconomic stabilization must now translate into export-led growth and job creation.

The PBC delegation, led by Chairperson Dr. Zeelaf Munir, met the visiting IMF team headed by Iva Petrova, the Fund’s mission chief to Pakistan, and Resident Representative Mahir Binici. The discussion focused on Pakistan’s transition from stabilization toward durable, investment-driven growth.

Participants acknowledged improvements in inflation and fiscal consolidation under the current IMF program. With the policy rate at 10.5% and a primary surplus recorded, the delegation said attention should shift to structural reforms needed to unlock private sector confidence.

Tax reform at the forefront

Tax rationalization formed a central part of the engagement, with the PBC arguing that the current structure places a disproportionate burden on compliant and documented enterprises.

The council said the continuation of the super tax across income, dividends and capital gains, along with extensive advance and withholding tax regimes, has raised effective corporate taxation at a time when Pakistan needs to expand exports and scale industry.

In line with a reform roadmap presented during the meeting, the PBC called for abolition of the super tax in all its forms, a phased reduction of the corporate tax rate to 25%, and rationalization of advance and withholding tax regimes that it said function as de facto minimum taxes. The delegation reiterated that the tax base should be broadened rather than deepened, with stronger enforcement to bring untaxed segments into the net.

Energy and policy consistency

The discussion also underscored the importance of policy consistency, with the delegation noting that frequent shifts in tax, energy and regulatory frameworks delay capital deployment and constrain export growth. It called for a credible, multi-year fiscal and energy roadmap to anchor long-term investment decisions.

Energy competitiveness was another focus. The PBC said high and volatile industrial tariffs, along with distortions in agriculture and food value chains, continue to impede value addition and export diversification. It emphasized that fiscal space created through stabilization should increasingly support productivity-enhancing and job-creating industry.

“Stabilization has provided breathing space. The priority now is institutionalizing growth. A competitive and equitable tax framework, predictable energy pricing and policy consistency are essential to expand exports, attract investment and generate employment at scale. The private sector stands ready to deploy capital where reform signals remain clear and credible,” Dr. Zeelaf said.