The Federal Board of Revenue (FBR), Pakistan’s apex authority for tax administration, has initiated the budget formulation process for the Fiscal Year 2025-26, with an aim to refine policies and address procedural inefficiencies. This early commencement reflects FBR’s commitment to fostering inclusivity and leveraging diverse perspectives for developing robust fiscal policies.
As part of this effort, FBR has invited proposals from stakeholders, including businesses, professional associations, and individual taxpayers, for amendments to the Finance Bill 2025. These proposals aim to shape policies regarding income tax, sales tax, federal excise duty, and Islamabad Capital Territory (ICT) tax on services.
The FBR has identified several key policy areas where it seeks input:
- Broadening the Tax Base: Proposals are encouraged to expand the taxpayer pool to ensure equitable participation in revenue generation. This measure is intended to strengthen fiscal capacity while ensuring fairness.
- Integrating Businesses into the GST Regime: Suggestions are invited to bring the entire value chain of businesses under the General Sales Tax (GST) framework, which is expected to enhance transparency and compliance.
- Progressive Taxation: Recommendations to introduce or enhance progressive taxation measures are welcome. These should aim to impose a higher tax incidence on affluent classes to promote equity in tax contributions.
- Phasing Out Tax Concessions: Submissions are sought to systematically eliminate unnecessary tax concessions and exemptions across all tax laws. This step aims to reduce revenue losses and promote fairness.
- Simplifying Tax Laws: Stakeholders are encouraged to identify redundancies and propose amendments to streamline tax laws, facilitating taxpayers and improving the ease of doing business.
- Neutral Taxation: Proposals to reduce tax arbitrage opportunities and align taxation principles with economic efficiency and neutrality are essential. This will minimize distortions and foster a level playing field.
- Addressing Anomalies: Inputs are required to rectify tax distortions, procedural lapses, and anomalies that hinder the smooth implementation of tax policies.
FBR emphasizes that the identified areas are illustrative and not exhaustive, urging stakeholders to provide clear, actionable, and data-backed suggestions. Proposals should include a detailed rationale and an analysis of the potential revenue impact to facilitate effective evaluation.
To streamline the submission process, stakeholders are requested to provide their proposals by January 31, 2025, preferably in MS Word or Excel format. Submissions can be emailed to the following addresses, based on the tax category:
- For ICT (Tax on Services): aamer.bhatti@fbr.gov.pk
- For Income Tax: secy.itb@fbr.gov.pk
- For Sales Tax and Federal Excise Duty: secy.stbudget@fbr.gov.pk
FBR also encourages submissions from trade associations and chambers of commerce, duly endorsed by their presidents or chairpersons. This ensures that proposals reflect a consensus and broader representation of industry stakeholders.
To maximize outreach, FBR has distributed this call for proposals to a wide array of stakeholders, including chambers of commerce across major cities, professional organizations, trade bodies, and tax advisory groups. These include entities such as the Federation of Pakistan Chambers of Commerce & Industry (FPCCI), Pakistan Business Council (PBC), and the Pakistan Tax Bar Association, among others.
This inclusive approach underscores FBR’s commitment to fostering a participatory and transparent policy-making process. By engaging stakeholders, FBR aims to create a fiscal framework that not only addresses current challenges but also lays the groundwork for sustainable economic growth.
Stakeholders are encouraged to seize this opportunity to contribute to the nation’s fiscal reforms and ensure their voices are heard in shaping Pakistan’s economic future.
