OICCI proposes tax cuts, super tax abolition for Budget 2026-27
Foreign investors seek lower corporate tax, simpler regime, raise refund delays and compliance issues
The Overseas Investors Chamber of Commerce and Industry (OICCI) has proposed a set of tax reforms for the Federal Budget 2026-27, including a phased reduction in corporate tax rates and the abolition of super tax, during a meeting with the Ministry of Finance.
The proposals were presented to Minister of State for Finance and Revenue Bilal Azhar Kayani as part of ongoing budget consultations, with foreign investors calling for a simplified and transparent tax framework.
OICCI recommended reducing the corporate tax rate to 28% in FY2026-27, with a gradual cut to 25% over three years, and phasing out the super tax. It noted that the combined impact of corporate tax, super tax and other levies raises the effective tax rate to around 46%.
The chamber also proposed lowering sales tax on goods from 18% to 17%, with a longer-term target of 15%, along with rationalisation of withholding taxes and a review of minimum tax provisions.
To address concerns over talent retention, OICCI suggested abolishing super tax and a 10% surcharge on higher-income salaried individuals, while capping the maximum personal tax rate at 25%.
It also raised concerns over high taxation on the banking sector, stating that it could limit capital deployment and increase the cost of financing for businesses.
Foreign investors highlighted operational issues, including delays in tax refunds, frequent compliance notices and weak coordination between federal and provincial tax systems.
The chamber emphasised the need to expand the tax base by bringing sectors such as agriculture, retail, real estate and services into the tax net, rather than increasing the burden on existing taxpayers.
OICCI also called for policy support for export-oriented sectors to sustain competitiveness, noting that such measures could be aligned with IMF programme requirements.
The finance ministry said stakeholder engagement would continue to support reforms aimed at broadening the tax base and improving transparency.
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