Business groups renew demand for exporters’ Final Tax Regime

KARACHI: Business representatives have urged the federal government to revise a series of policy decisions in the upcoming budget for 2026-27, arguing that recent fiscal measures have hurt economic activity, exports, investment and industrial competitiveness.

In a joint statement, Businessmen Group Chairman Zubair Motiwala and Karachi Chamber of Commerce and Industry President Rehan Hanif said policymakers should incorporate the business community’s proposals into the next budget. They said the results of several fiscal steps taken over the past two years should serve as a warning, adding that the Karachi chamber had opposed many of those measures before they were introduced.

According to the two business leaders, those objections were not taken into account, and the outcome was damaging for businesses, exports, investment, employment and revenue collection. They said the shift of exporters from the Final Tax Regime to the Normal Tax Regime under the Finance Act 2024 reflected a short-term revenue approach that did not account for longer-term effects on exports and economic growth.

Motiwala and Hanif called for the immediate restoration of the Final Tax Regime for all exporters at a rate of one per cent. They also voiced concern over the withdrawal of Export Facilitation Scheme benefits on yarn and fabric, saying the scheme had been important in improving the export sector’s competitiveness.

Lasbela chamber proposals

Separately, the Lasbela Chamber of Commerce and Industry asked the federal government to bring broad-based reforms in taxation, energy, trade and investment policy in the coming budget to support industrial expansion, attract investment and improve business confidence.

The chamber said Pakistan’s economic recovery depended on the creation of a competitive and predictable business environment. It added that its recommendations were in line with the government’s stated goal of promoting industrialisation and creating employment opportunities.

The Lasbela chamber also proposed a multi-year macroeconomic stabilisation framework with clearly defined targets for inflation and reducing the fiscal deficit. It further called for a transparent foreign exchange policy to promote consistency in policymaking and strengthen investor confidence.

The demands come as business bodies continue pressing the government for tax and policy changes ahead of the federal budget, with exporters and industry representatives focusing on competitiveness, predictability and investment-friendly measures.