ISLAMABAD – The Federal Board of Revenue (FBR) has said reductions in tax rates will not lead to an outflow of investment and that further cuts will be considered in the coming years.
The FBR officials also informed a Senate subcommittee that the tax rate on exporters had been reduced from 2 per cent to 1.25pc.
The Senate Standing Committee on Finance’s subcommittee met under the chairmanship of Pakistan Peoples Party (PPP) Senator Talha Mahmood, where FBR officials briefed members on concerns over multinational companies leaving Pakistan due to high taxes.
The officials maintained that changes in tax rates would not result in capital flight and said efforts would continue to lower the tax burden in the coming years.
They said exporters had been given a tax-rate reduction from 2pc to 1.25pc, while the prime minister had approved Rs80 billion in tax relief for exporters.
The FBR officials said a total tax relief package worth Rs361bn had been provided during the current year. They added that no businessperson had been arrested or faced an FIR during the year and that committees had also been established to address issues faced by the business community.
The committee was told that taxpayers could avoid audits by paying their taxes, while tax filers had also been given the option to revise their returns.
According to the FBR, taxes were increased following the economic crisis in 2022, while certain foreign exchange restrictions were also imposed at the time. The authorities have since been working to address the challenges that emerged after the crisis.
Officials said tax rates were first reduced for salaried individuals, while the government had recently abolished and lowered the super tax. They said Rs55bn in tax relief had been provided under the super tax.
The officials added that non-banking companies were now subject to a 29pc tax rate and that a faceless tax system had also been introduced this year.
During the meeting, Senator Talha Mahmood expressed anger over the absence of the finance secretary, saying the official had failed to attend the session.
Mahmood said a privilege motion would be moved against the finance secretary and that the matter of his absence would also be brought before the prime minister.
The senator said he wanted reforms in the FBR and aimed to improve the country’s tax policy.
