OICCI Shares Plan for FBR to Raise Up to Rs. 4 Trillion Tax Revenue in FY25

The Overseas Investors Chamber of Commerce and Industry (OICCI) on Friday posted a plan on LinkedIn that would help the Federal Board of Revenue (FBR) Collect up to Rs. 4 trillion in tax revenue during the fiscal year 2024-25. Tax rates are a significant challenge for business owners globally, and Pakistan faces similar issues with investment and tax revenues. Particularly, the informality of the economy, tax administration, and high tax rates are deterrents for investors. According to OICCI analysis, the country’s withholding tax regime, with over 200 classifications, is overly complex due to multiple sections and differing rates for active and non-active taxpayers, even though less than half of the sections generate 94 percent of the revenue, making such classifications excessive. Simplifying the tax regime is essential to broadening Pakistan’s tax net and boosting revenue. The OICCI recommends harmonizing sales tax rates across all jurisdictions and sectors, implementing a single sales tax return for all sectors (similar to the telecom sector), and reducing tax return filing frequencies to ease compliance. Additionally, digitalization and enhancing the FBR’s research capabilities are key to identifying potential taxpayers and addressing income discrepancies, potentially unlocking Rs. 3-4 trillion in tax revenue for FY25.