PBF urges lower taxes to boost Pakistan's economy

The Pakistan Business Forum (PBF) has made several recommendations for the upcoming federal budget. They are calling for a reduction in general sales tax (GST) and the removal of the super tax. The goal is to boost economic activity and create more jobs. In their proposals, the PBF wants a lower tax on domestic cotton to match the rate for imported cotton. They suggest abolishing the current 18% tax on domestic cotton. The forum also recommends a seven-year tax exemption for the mining and mineral sectors to attract more investment. To support the construction industry, the PBF proposes canceling a specific tax regulation and reducing withholding tax for first-time homebuyers. They have suggested a fixed tax system, with a monthly fee of Rs20,000 for larger traders and Rs10,000 for smaller traders. The PBF is pushing for a lower annual corporate income tax rate of 25% and urges changes to make it easier for manufacturers to export goods. They are also asking for budget allocations to develop southern Balochistan. The forum highlights the need for the tax system to be straightforward and supportive of growth. They emphasize that wealth creation should be rewarded. Currently, the industry pays more taxes than its share of GDP, which they believe should change to encourage job creation and local manufacturing. High energy costs and a weak currency are adversely affecting the manufacturing sector, leading to job losses. The PBF sees these challenges as an opportunity to make necessary structural changes in the economy. They aim to increase the tax base and target subsidies for those in need. This year’s proposals focus on sustaining jobs in manufacturing and services while supporting an economic recovery based on exports and local production.