The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has submitted several recommendations to the Ministry of Finance for the upcoming budget 2026-27, including major Tax Relief proposals for salaried individuals and businesses.
According to the proposals, FPCCI has suggested reducing income tax rates for the salaried class by five percent. If approved, the maximum income tax rate for salaried individuals would decrease from 35 percent to 30 percent.
The business body also recommended abolishing the existing nine percent surcharge imposed on salaried taxpayers. In another major Tax Relief proposal, FPCCI asked the government to increase the annual non-taxable income threshold from Rs600,000 to Rs1.2 million.
Business leaders say these measures could reduce financial pressure on middle-income earners who are currently facing rising living costs and inflation.
FPCCI also submitted proposals aimed at boosting exports and industrial growth in Pakistan. The organization recommended restoring the Final Tax Regime for goods exporters to support export-oriented industries.
For the information technology sector, FPCCI proposed maintaining the current 25 percent export tax rate until 2035. FPCCI President Atif Ikram Sheikh said stable policies could help increase Pakistan’s IT exports from $3.8 billion to nearly $10 billion in the coming years.
The organization further proposed increasing the turnover threshold for small and medium enterprises (SMEs) from Rs250 million to Rs500 million. It also suggested linking this limit with the Consumer Price Index (CPI) to adjust according to inflation.
In another significant Tax Relief recommendation, FPCCI urged the government to reduce the income tax rate for manufacturers from 29 percent to 20 percent.
The business body also called for the complete abolition of super tax, arguing that high taxes discourage local and foreign investment in the country.
Speaking about the economy, Atif Ikram Sheikh said Pakistan had faced serious economic challenges in 2022 but was now moving toward stability.
He credited the government and national leadership for improving economic conditions and increasing international confidence in Pakistan.
The FPCCI president also highlighted Pakistan’s diplomatic role in regional matters, including efforts related to tensions between Iran and the United States.
According to business leaders, the proposed Tax Relief measures could improve economic activity, encourage investment, and provide much-needed support to salaried individuals and businesses.
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The recommendations are now under review as the government prepares the federal budget for the next financial year.
