ISLAMABAD: The Special Investment Facilitation Council (SIFC) has expressed concern that Pakistan’s steep corporate taxes are pushing investors away at a time when the country is struggling to attract foreign capital. The issue surfaced during a two-day economic dialogue organised by the Pakistan Business Council, where business leaders openly questioned the country’s investment climate.
Lt. Gen. Sarfraz Ahmed, the SIFC’s National Coordinator, acknowledged that Pakistan’s effective corporate tax rate can climb as high as 50 percent in certain cases. “Who would want to invest under such conditions?” he remarked, echoing the sentiments of several participants. He assured the audience that the government recognises the gravity of the problem and is actively assessing options, although he refrained from announcing any immediate policy shifts.
Responding to the concerns, Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial stressed that any reduction in taxes must be paired with stronger compliance to prevent a potential revenue loss of around Rs1.6 trillion. He emphasised that tax reforms cannot move forward unless businesses demonstrate broader participation and transparency.
Reflecting on Pakistan’s struggle to bring in foreign investment over the last three years, Mr. Sarfraz admitted that international capital follows only when domestic investors show confidence. He said the government is now shifting its approach by engaging Pakistan’s own business leaders and industry giants before pitching projects abroad.
“We want our own sectoral champions to take the lead,” he said. “Bring your proposals. If your project is strong enough to attract investors, we will stand with you from start to finish.” He assured the business community that the SIFC would help connect local entrepreneurs with serious investors, particularly from the GCC and Saudi Arabia, who often demand clarity about reliable partners in Pakistan.
In a parallel session, Mr. Langrial briefed businesses on FBR’s ongoing digital reforms, which aim to plug loopholes, improve documentation, and modernise taxpayer services. He outlined the government’s plan to gradually phase out the super tax and rationalise various corporate tax rates — a move dependent on closing the compliance gap.
The FBR chairman also shared the government’s ambitious target of raising the tax-to-GDP ratio to 18 percent by 2028. According to the plan, the FBR will contribute 13.85 percent, provinces 3 percent, and the remainder will come from the Petroleum Development Levy.
PBC Chairperson Dr. Zeelaf Munir and CEO Javed Kureishi also addressed the gathering, emphasising that Pakistan must urgently strengthen its economic governance and investor confidence to secure a more stable financial future.
