The Senate Standing Committee on Finance and Revenue has recommended a major tax relief package for exporters, calling on the government to adopt a simpler tax structure and reduce the overall burden on the country’s export sector.
The recommendation came during a contentious committee meeting where business leaders argued that exporters continue to face uncertainty despite repeated assurances that a streamlined tax mechanism would be restored. Representatives from the business community urged policymakers to introduce a fixed one percent tax model, saying it would improve competitiveness and ease compliance requirements.
Several lawmakers supported the proposal and pressed for even deeper cuts. Senator Talha Mahmood argued that exporters should be taxed at a lower rate, suggesting a 0.5 percent levy instead of the rates currently under consideration. He warned that excessive taxation could discourage exports and weaken Pakistan’s position in international markets.
Finance Minister Muhammad Aurangzeb defended the government’s approach, highlighting a series of measures already introduced to support exporters. He noted that the one percent advance tax on exports had been abolished, super tax slabs affecting exporters had been removed, and subsidized financing was available to the sector at a capped rate of 4.5 percent.
Aurangzeb maintained that every sector of the economy must contribute to the national revenue base, while dismissing concerns that Pakistan could face a repeat of the economic crisis experienced in 2022. According to the minister, the country currently has adequate domestic and external financial buffers to withstand potential pressures.
The committee also reviewed concerns over delayed tax refunds. While some senators criticized the refund process, business representatives acknowledged that the FASTER refund system had significantly improved the speed of payments compared with previous years.
At the conclusion of the meeting, the committee formally recommended restoring a simplified single-tax framework for exporters and reducing the sector’s tax burden to support growth, investment, and export competitiveness.
