The upcoming federal budget has begun to create hope among salaried individuals across Pakistan. New proposals submitted to the government suggest major changes in taxation policies for the next fiscal year. The latest recommendations focus strongly on providing budget tax relief to employees, exporters, manufacturers, and small businesses.
The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has sent its official proposals for Budget 2026–27 to the Ministry of Finance. The business body has demanded immediate steps to reduce the financial burden on taxpayers. As a result, the discussion around budget tax relief has gained significant public attention.
FPCCI proposed a major reduction in income tax rates for salaried individuals. The organization recommended reducing the highest tax slab from 36 percent to 30 percent. Moreover, it also requested the government to completely remove the additional 9 percent surcharge imposed on salaried employees.
At the same time, FPCCI proposed increasing the non-taxable annual income limit from Rs600,000 to Rs1.2 million. This recommendation could provide direct budget tax relief to middle-income families already struggling with inflation and rising living expenses.
In addition, the federation suggested restoring the Final Tax Regime for goods exporters. Business leaders believe this move can support export growth and improve investor confidence. FPCCI also asked the government to maintain the existing 25 percent export tax rate for the IT sector until 2035 to encourage long-term investment.
The organization further recommended increasing the SME turnover threshold from Rs250 million to Rs500 million. It also advised linking the threshold with the Consumer Price Index to ensure better economic adjustment in future years.
Meanwhile, FPCCI proposed reducing the income tax rate for manufacturers from 29 percent to 20 percent. According to industry representatives, lower taxes can help industries expand production and create more employment opportunities.
FPCCI President Atif Ikram Sheik stated that stable economic policies could increase Pakistan’s IT exports from $3.8 billion to nearly $10 billion. He also said the super tax discourages investment and damages business confidence. Therefore, he urged the government to abolish the super tax completely in the upcoming budget.
He further explained that Pakistan faced serious economic pressure in recent years. However, he added that the country is now moving toward stability due to consistent economic and diplomatic efforts.
The proposed budget tax relief measures now remain under review. However, many taxpayers and businesses expect the government to announce significant incentives in the federal budget next month.
