OICCI Demands Tax Relief for Salaried Class in Upcoming Budget

The Overseas Investors Chamber of Commerce and Industry (OICCI) has urged the government to give immediate and substantial tax relief to the salaried class and the corporate sector in the 2025-26 budget. Talking to a news daily, the OICCI Chief Executive M. Abdul Aleem said the current tax regime was unjust and unsustainable. He said salaried individuals and compliant companies have shouldered a disproportionate share of the tax burden for years, while large parts of the economy remain untaxed. He said Pakistan’s rising expenditure, particularly on defence, demands urgent tax reforms to expand the base and relieve pressure on compliant taxpayers. He warned that continued inaction will compromise Pakistan’s ability to meet IMF targets, including the primary surplus of 1.6 percent of GDP for the upcoming fiscal year. The OICCI has submitted detailed tax proposals. These include doubling the taxable income 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 widen the tax net without hurting low-income earners. It also calls for the removal of the 10 percent income tax surcharge on individuals earning over Rs. 10 million annually. The chamber has demanded the restoration of tax credits for investments in mutual funds, IPOs, and life insurance, and the reintroduction of deductible allowances for housing loans, education, and medical expenses. It also proposes a gradual reduction in the corporate tax rate from 28 to 25 percent over three years and the abolition of the super tax to improve competitiveness. The OICCI’s proposals also include phasing out tax exemptions in former FATA/PATA areas, enforcing a nationwide track-and-trace system to curb illicit tobacco trade, and requiring monthly publication of tax refund recipients and import data to improve transparency. It has also recommended demonetizing the Rs. 5,000 note to reduce the undocumented cash economy.