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The Overseas Investors Chamber of Commerce and Industry (OICCI) has urged the government to demonetize the Rs 5,000 note in the upcoming budget to reduce the undocumented cash economy.
Speaking to the media, OICCI CEO Abdul Aleem called the current tax regime “unjust and unsustainable”, saying that the tax burden is unfairly borne by salaried people and corporate taxpayers while large parts of the economy remain untaxed.
Aleem stressed the need to expand the tax base, especially as defence spending rises, and warned that failure to reform could harm Pakistan’s ability to meet IMF targets, including a 1.6 percent primary surplus of GDP.
READ: Pakistan seeks tax relief for salaried class in IMF budget talks
OICCI has submitted a list of proposals, including doubling the income tax threshold to Rs. 1.2 million, and introducing a flat Rs 1,000 tax for those earning between Rs 600,000 and Rs 1.2 million to expand the tax net without burdening low-income groups.
Other suggestions include ending the 10 percent income tax surcharge for those earning above Rs 10 million, and restoring tax credits for investments in mutual funds, IPOs, and life insurance. It also wants deductible allowances for education, medical and housing loans reinstated.
OICCI has also proposed a gradual reduction in corporate tax from 28% to 25% over three years and urged the government to abolish the super tax to boost business competitiveness.
To improve transparency and curb illicit trade, OICCI recommended ending tax exemptions in FATA/PATA, enforcing a track-and-trace system for tobacco, and publishing monthly tax refund and import data.
