Business Recorder
ISLAMABAD: The textile exporters, dairy, telecom, and real estate sector have strongly proposed that Finance Bill 2026 should reduce tax burden on documented sectors, including abolishing the super tax and reducing rates of Withholding Taxes (WHT) in the upcoming budget. During the Senate Standing Committee on Finance and Revenues which met under Chairmanship of Senator Saleem Mandviwalla here at the Parliament House on Thursday, the Telecom Operators Association on Thursday presented a detailed presentation and demanded of the government to abolish custom duty on import of 5G equipment as committed by the PM Shehbaz Sharif on the occasion of approving last spectrum auction. They also asked for reducing WHT rate from 6 percent to 4 percent u/s 153 and carry forward of turnover tax from 2 years to 5 years u/s 113 (ITO 2001). It was the demand of telecom operators to reduce advance withholding tax from 15 percent to 8 percent in the coming budget and reduction of overall Duties and taxes from current position of 67 percent to 5 percent on import of Optic Fiber Cable. They also demanded for revocation of Commissioner’s power to reject the advance tax estimate filed by taxpayers’ u/s 147 ITO 2001. The Consumer Association of Pakistan informed the committee that formula milk prices are witnessing weekly increases ranging from Rs400 to as high as Rs1,500. The association recommended expansion and revision of the Third Schedule. The All Pakistan Textile Mills Association (APTMA) recommended the removal of the super tax and the rationalization of withholding tax on exporters. The Towel Manufacturers Association of Pakistan recommended restoration of zero-rating status, rationalization of duties and taxes, and revision of withholding tax rates for small and medium enterprises. The Construction Association of Pakistan recommended inclusion of the sector under the minimum tax regime and sought permission for up to 40 percent cash transactions while acting as a withholding agent. The Towel Manufacturers Association of Pakistan recommended restoration of zero-rating status, rationalization of duties and taxes and revision of withholding tax rates for small and medium enterprises. Pakistan Dairy Association (PDA) asked the government to reduce the rate of GST from 18 percent to 10 percent in the upcoming budget. They argued that the share of loose milk stood at Rs 7.9 trillion while the formal sector’s share hovered around Rs 331 billion with tax contribution of Rs 53 billion revenues on annual basis. The Fruit Juice Council argued that there was a decline of 50 percent in their sale so they asked to reduce the rate of Federal Excise Duty (FED) from 20 to 10 percent and urged that fruit juices should not be clubbed with fizzy drinks for taxation purposes percent. It was informed that natural sugar and added sugar should be treated separately, how ministry said that it is not separate because of same health effect terming it an internationally accepted practice. The committee asked the association to present a scientific report highlighting the difference between natural and added sugars before the proposal could be further considered. The Pakistan Poultry Association recommended rationalization of the sales tax regime and proposed incentives for women’s participation in the corporate labour force through salary-related facilitation measures. The Pakistan Pharmaceutical Manufacturers Association (PPMA) recommended increasing the foreign exchange retention rate to 35 percent, introducing performance-based incentives, revising separately imposed sales taxes and reviewing hidden taxation. Representatives of the association stated that implementation of these measures could significantly enhance industrial activity and potentially double revenue generation. The Pakistan Association of Large Steel Producers proposed reforms in the method of tax collection. Chairman Senator Saleem Mandviwalla observed that if all steel mills collectively agree on a proposal, the matter should be resolved as it constitutes a rational demand. He further stated that the proposal could be tested on a trial basis and is strongly recommended for incorporation in the upcoming budget. The Islamabad Chamber of Commerce recommended reducing withholding tax to lower transaction taxes on real estate, revising penalty rates and amending definitions to ensure non-applicable entities are not unnecessarily charged. The Exchange Companies Association of Pakistan informed the committee that the official dollar market rate currently stands at Rs279 while the black market rate is approximately Rs286. Representatives stated that the difference between exchange companies and the grey market ranges from Rs5 to Rs8 and recommended increasing the permissible exchange rate margin in order to compete with the illegal market. Following detailed consultations, the Senate Standing Committee on Finance and Revenue compiled the recommendations submitted by all participating associations and stakeholders for onward consideration by the Ministry of Finance and relevant authorities during the formulation of the Federal Budget 2026-27. Copyright Business Recorder, 2026
Go to News Site