ISLAMABAD (Web Desk) – The Economic Policy and Business Development Think Tank has unveiled its Shadow Budget 2026-27, proposing a series of tax reforms aimed at reducing the cost of doing business, encouraging investment and broadening Pakistan’s tax base.
The shadow budget, issued with the support of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), was released under the signature of Ahmad Nawaz Sukhera.
According to the document, the think tank has recommended reducing the corporate tax rate from 29 per cent to 25 per cent. It also called for the abolition of the super tax on all businesses except banks and proposed the removal of withholding tax on inter-corporate dividends.
The proposals emphasise lowering the overall cost of doing business in Pakistan to stimulate economic activity and attract investment. The think tank suggested reducing the maximum tax rate for salaried individuals from 35 per cent to 20 per cent and exempting annual salaries of up to Rs800,000 from income tax.
In its recommendations, the think tank proposed cutting the number of withholding tax categories from 52 to 32. It further suggested reducing the sales tax rate from 18 per cent to 15 per cent over the next three years to ease the burden on consumers and businesses.
The shadow budget also called for the abolition of the non-filer category, arguing that all retailers, vendors and merchants should instead be brought into the formal tax net.
For the real estate sector, the think tank proposed reducing taxes from the current rate of 5.5 per cent and introducing a uniform tax rate of 0.5 per cent. It also urged the government to ensure the immediate payment of tax refunds to businesses and expedite decisions in tax-related cases worth approximately Rs5.7 trillion currently pending before courts.
As part of broader institutional reforms, the Economic Policy and Business Development Think Tank introduced a one-page tax return form designed to simplify tax filing procedures.
The organisation also recommended restructuring the Federal Board of Revenue (FBR), including the appointment of a qualified and accountable chairman for a fixed three-year term. It further proposed the establishment of separate boards for customs and income tax and called for private sector representation on the FBR board.
The think tank said the proposed measures would help improve tax compliance, support economic growth and create a more business-friendly environment across the country.