ISLAMABAD: The Federal Board of Revenue (FBR) has cut the tax rate applicable to exporters from 2 percent to 1.25 percent, as part of a wider tax relief package worth Rs361 billion extended during the current fiscal year, officials informed a Senate panel on Monday.
The disclosure was made during a briefing to the Senate Standing Committee on Finance’s subcommittee, chaired by Pakistan Peoples Party Senator Talha Mahmood. FBR representatives told the committee that the rate cut for exporters was intended to ease the cost of doing business and encourage greater investment, noting that the prime minister had separately approved Rs80 billion in dedicated relief for the export sector.
Addressing concerns that Pakistan’s tax burden could push multinational companies to scale back or exit the country, FBR officials maintained that prevailing rates were unlikely to trigger a significant outflow of investment, and indicated that further reductions would be considered in the years ahead.
The briefing also touched on broader reforms carried out in recent years, including reduced taxation for salaried individuals and the lowering or abolition of the super tax, which officials said had provided around Rs55 billion in relief.
The corporate tax rate for non-banking companies currently stands at 29 percent, while a faceless assessment system has been introduced this year to limit direct interaction between taxpayers and tax officials.
Officials further told the committee that no businessperson had faced arrest or an FIR over tax matters during the year, and that dedicated committees had been set up to resolve concerns raised by the business community. Taxpayers, they added, could avoid audit proceedings by clearing dues, and filers now have the option to revise submitted returns.
Senator Mahmood, meanwhile, voiced displeasure over the finance secretary’s absence from the meeting, saying he would pursue a privilege motion and raise the matter with the prime minister.
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