The PBC has called for a rationalization of advance and withholding tax regimes, warning that they function as de facto minimum taxes and stifle investment and economic growth
By S.M. Inam/ Mehrab Shah Afridi
ISLAMABAD: Both multinational and major local companies have urged the International Monetary Fund to abolish the super tax, reduce corporate rates gradually, and rationalize advance and withholding taxes to ease the burden on compliant businesses, Daily Metro Morning reported on Sunday.
The visiting IMF review mission held separate meetings with the Overseas Investors Chamber of Commerce & Industries (OICCI), representing over 200 multinational firms, and the Pakistan Business Council (PBC), which represents 110 major local and foreign companies in Karachi.
Both bodies told the IMF that the tax burden on compliant firms was disproportionately higher than on tax-evading sectors, making their businesses increasingly unviable. The PBC proposed five key recommendations to the IMF mission to stabilize Pakistan’s struggling economy.
These included an immediate reduction in corporate and sales tax rates, the abolition of super tax, removal of inter-corporate dividend tax on subsidiaries and associates, and rationalization of withholding taxes on exports. The council also called for a reduction in energy rates, taking into account future benefits from the repayment of power companies’ debts and projected increases in capacity utilization.
In a statement, the PBC said a delegation led by Chairperson Dr Zeelaf Munir met with the IMF mission, headed by Iva Petrova, Head of Mission to Pakistan, and Mahir Binici, Resident Representative. Discussions focused on Pakistan’s transition from macroeconomic stabilization towards sustainable, export-led growth.
The PBC noted that stabilization must now translate into investment, productivity, and employment generation. With the policy rate at 10.5% and a primary surplus recorded, the talks centered on structural measures to unlock private sector confidence. Tax rationalization was a central theme.
The council highlighted that the current tax structure places a disproportionate burden on compliant and documented enterprises. It called for the abolition of super tax in all forms, a phased reduction of corporate tax to 25%, and reform of advance and withholding tax regimes, which act as de facto minimum taxes.
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