Pareesa Afreen 
Nov 25, 2025
An image of the Federal Board of Revenue (FBR) building. — X/@FBRSpokesperson
The federal government has agreed in principle to overhaul its taxation framework for multinational corporations (MNCs) in a bid to halt their exit from Pakistan and stabilise the investment environment.
According to officials, it is a revised policy, aimed at transitioning Pakistan away from a high-tariff import protection model towards a competitive, export-oriented strategy.
The Federal Board of Revenue (FBR) is also reviewing changes in long-standing concessionary Self-Regulatory Organisations (SROs) and high tariff protections that have characterised corporate taxation for years.
This issue of multiplicity of indirect taxes, especially the Federal Reserve System (FED), is one strong point of disagreement, a senior government official said. "Multiplicity of taxes should go if the highest taxpaying and compliant companies have to be provided with a level playing field," he added. Abrupt increases in taxes through mini-budgets and sudden changes in policies also result in uncertainty for large companies.
According to industry sources, FBR field offices often reach out to companies for advance tax payments to meet lofty revenue targets, further denting investor confidence.
Despite FED having been introduced partly to reduce sugar consumption, officials indicate that the structured beverage sector, which bears the bulk of this taxation, uses only a small share of the country's sugar supply, while large-scale sugar consumers in the informal sector remain untaxed.
A range of reforms has been suggested by business bodies, including the Overseas Investors Chamber of Commerce and Industry and the Pakistan Business Council.
These include establishing a single federal authority for revenue collection, reducing corporate tax rates to 25%, gradually phasing out the super tax, lowering turnover tax for regulated industries, and separating tax policy from the FBR. They also recommend reducing withholding taxes and gradually bringing the Goods and Services Tax (GST) rate down to 15%.
The government is expected to incorporate several of these proposals as it works to create a stable, predictable policy framework for global investors.
