Islamabad: The Islamabad Chamber of Commerce and Industry (ICCI) has welcomed several pro-business initiatives announced in the Federal Budget 2026-27, while urging the government to pursue broader structural reforms, tax rationalization, and policies aimed at achieving sustainable economic growth.
Speaking at a press conference, ICCI President Sardar Tahir Mahmood praised the government’s efforts to maintain economic stability under challenging circumstances and acknowledged the inclusion of several recommendations submitted by the business community.
According to ICCI, the budget contains a number of measures that could help stimulate investment, strengthen business confidence, and support long-term economic development.
ICCI Appreciates Economic Stabilization Efforts
Sardar Tahir Mahmood congratulated the government on its efforts to steer the economy toward greater stability despite domestic and international economic pressures.
He noted that maintaining macroeconomic stability is an important achievement but emphasized that the next stage of economic policy should focus on accelerating growth, increasing productivity, and attracting investment.
“The government deserves recognition for steering the economy towards stability. However, the next phase must focus on stimulating investment, enhancing productivity, and creating conditions for sustained economic growth,” he said.
Business leaders have increasingly stressed the need to move beyond stabilization measures and adopt policies that encourage private-sector expansion and industrial development.
Real Estate Tax Relief Receives Strong Support
Among the measures welcomed by ICCI was the government’s decision to reduce withholding taxes in the real estate sector by up to 50 percent.
According to Mahmood, the reduction could help revive investment activity and restore confidence in a sector that plays a significant role in Pakistan’s economy.
The real estate industry contributes to construction activity, employment generation, and allied industries such as cement, steel, and housing development. Stakeholders have long argued that excessive taxation has discouraged investment and slowed market activity.
Abolition of Capital Value Tax on Foreign Wealth Praised
The ICCI president also welcomed the abolition of the 1 percent Capital Value Tax (CVT) on foreign wealth.
He said the move is expected to improve Pakistan’s attractiveness for overseas Pakistanis and international investors by reducing the tax burden on foreign-held assets.
Economists note that encouraging overseas investment remains an important objective as Pakistan seeks to strengthen foreign exchange inflows and attract capital from the Pakistani diaspora.
Digital Economy Expansion Viewed as Positive Step
Mahmood praised the government’s commitment to expanding the digital economy through 2029.
He noted that Islamabad has emerged as a major center for information technology professionals, startups, software companies, and freelancers.
The continued development of the digital sector, he said, could create new employment opportunities, increase exports, and enhance Pakistan’s competitiveness in global technology markets.
The IT industry has become one of Pakistan’s fastest-growing export sectors in recent years, contributing significantly to services exports and digital entrepreneurship.
Relief for Corporate Sector Welcomed
ICCI also welcomed the withdrawal of super tax for businesses earning up to Rs500 million.
Mahmood described the measure as an important source of relief for companies and said it could encourage expansion, investment, and business growth.
The business community has repeatedly called for a reduction in additional tax burdens, arguing that lower costs can help companies reinvest profits and increase economic activity.
Support for Simplified Tax Regime for Small Traders
The chamber expressed support for the government’s proposed simplified tax scheme for small traders.
According to Mahmood, the initiative has the potential to improve documentation of the economy and broaden the tax base.
Expanding the number of registered taxpayers remains a major objective for policymakers seeking to increase revenue collection without imposing additional burdens on existing taxpayers.
However, he argued that taxes imposed on exporters should be removed entirely to strengthen Pakistan’s export competitiveness and support foreign exchange earnings.
FBR Digitalization Efforts Receive Appreciation
ICCI also praised the efforts of the Federal Board of Revenue (FBR) to digitize tax administration and modernize compliance procedures.
Mahmood emphasized that reducing direct interaction between taxpayers and tax officials can improve transparency and reduce opportunities for discretionary decision-making.
He said modern digital systems could make tax compliance easier while helping improve the overall business environment.
Tax experts have consistently highlighted digitalization as a key tool for improving efficiency, reducing corruption risks, and enhancing revenue administration.
Read more:ICCI Seeks Expanded Membership to Strengthen Business Voice in Islamabad
Concerns Remain Over Some Tax Measures
Despite welcoming several initiatives, ICCI expressed concerns about areas where the budget did not meet business community expectations.
Mahmood pointed specifically to the absence of tax relief for Associations of Persons (AOPs), a longstanding demand from many businesses and professional partnerships.
He argued that sustainable economic growth cannot be achieved solely through increased taxation and called for broader reforms to reduce the cost of doing business.
“The transition from economic stabilization to sustainable growth cannot be achieved through higher taxation alone,” he stated.
Call for Electric Vehicle Tax Reforms
The ICCI president also urged the government to review taxation policies related to electric vehicles (EVs).
He said incentives for EV adoption would support Pakistan’s environmental goals, reduce dependence on imported fuels, and encourage investment in clean technologies.
Many industry experts believe targeted incentives could accelerate the growth of Pakistan’s emerging electric vehicle market while contributing to climate and energy objectives.
Business Community Seeks Continued Engagement
Mahmood emphasized the importance of regular consultation between policymakers and the private sector.
He expressed hope that future economic decisions would continue to incorporate business community feedback to support industrial growth, entrepreneurship, exports, and job creation.
According to ICCI, collaboration between government and the private sector remains essential for unlocking Pakistan’s economic potential and achieving long-term competitiveness.
Looking Ahead
While welcoming several business-friendly measures in the Federal Budget 2026-27, the Islamabad Chamber of Commerce and Industry believes additional reforms are necessary to sustain economic momentum.
The chamber argues that tax rationalization, regulatory simplification, investment incentives, and policy consistency will be critical in moving Pakistan from stabilization toward higher growth.
As the budget moves through the parliamentary process, business leaders are expected to continue advocating for measures that encourage investment, boost exports, and strengthen private-sector development.
FAQs
What budget measures did ICCI welcome?
ICCI welcomed reduced withholding taxes in real estate, abolition of the Capital Value Tax on foreign wealth, digital economy initiatives, and relief from super tax for certain businesses.
Why did ICCI support the reduction in real estate taxes?
The chamber believes the move can revive investment and restore confidence in the property sector.
What is ICCI’s view on the digital economy?
ICCI supports the government’s plan to expand the digital economy, viewing it as a source of jobs, exports, and innovation.
What concerns did ICCI raise?
The chamber expressed concern over the lack of tax relief for Associations of Persons (AOPs) and called for broader tax reforms.
What additional reforms does ICCI recommend?
ICCI advocates tax rationalization, export incentives, EV-friendly policies, regulatory reforms, and stronger private-sector engagement.
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