https://www.dawn.com/news/1974917

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LAHORE: The Overseas Investors Chamber of Commerce and Industry (OICCI) has urged the government to immediately freeze all preferential tax treatments — including new exemptions, zero-rating and special regimes — whether introduced through SROs or legislation, unless routed through a fully operational Tax Policy Office (TPO) with a published rationale.

In a special report titled Pakistan’s Tax Paradox, the OICCI describes Pakistan’s tax system as one characterised by a narrow tax base and high tax rates, with tax revenues remaining largely stagnant as a share of GDP despite growth in absolute collections.

It notes that Pakistan’s tax-to-GDP ratio has remained between 9 and 10 per cent for over a decade, although reforms have recently pushed it into double digits, reaching 10.3pc in FY25.

However, this remains well below international benchmarks. According to the World Bank and the IMF, a tax-to-GDP ratio exceeding 15pc is essential for sustainable growth, poverty reduction and the provision of basic public services.

The report highlights that OECD countries collect taxes equivalent to 34pc of GDP, while the Asia-Pacific average stands at 19.3pc. Pakistan lags behind regional peers such as India (17pc) and Bangladesh (12pc).

OICCI recommends that Pakistan’s tax reform agenda be guided by clear outcome targets and disciplined sequencing. It proposes raising the tax-to-GDP ratio from the current 10-12pc range to around 13pc in the short term and above 15pc in the medium term to support growth, strengthen fiscal stability and reduce reliance on debt.

Among its key recommendations, the report calls for immediate operationalisation of the Tax Policy Office as a gatekeeper for all tax changes, along with a clear separation of tax policy from the Federal Board of Revenue (FBR)’s administrative functions.

It also proposes freezing all preferential treatments, removing arbitrary forms of taxation to minimise refund issues, implementing a structured refund clearance plan, starting with refund-heavy sectors, and adopting a consultative approach in designing and reviewing tax regimes.

The report also recommends eliminating the super tax under Sections 4B and 4C, reducing the corporate tax rate to 28pc, cutting withholding taxes to 5pc and fixing the maximum salary tax slab at 25pc.

Published in Dawn, February 22nd, 2026

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ISLAMABAD: With the 5G spectrum auction scheduled for March 10, the Ministry of Industries has also initiated the move to roll out advanced compatible phone devices at the same time that telecom operators are ready.

Due to the spectrum auction across several bands, the 4G coverage area in the country will expand, increasing the service area, but this will also push demand for smartphones.

The Ministry of Industries and Production has finalised the Mobile and Electronic Devices Manufacturing Policy 2026-33 at a meeting chaired by Special Assistant to the Prime Minister Haroon Akhtar Khan.

Mr Khan said that the policy is a milestone initiative and, starting with mobile phones, will eventually help the country’s industrial sector, as electronics have dominated all spheres.

Govt finalises policy as spectrum auction looms

The industry has welcomed the new policy, noting that with fresh spectrum scheduled for next month, demand for new and more advanced phones, including 5G-compatible sets, will increase.

“The new policy comes at the right time as the telcos will take around 5-6 months after obtaining the spectrum to implement the infrastructure for introducing 5G services in key urban areas and 4G in other cities and towns,” said Amir Allawala, senior member of the Pakistan Mobile Phone Manufacturers Association.

“The mobile phone industry also needs around the same time to shift to 5G sets, and many companies making feature phones are already in the process of shifting their production lines to smartphones,” he added.

The key feature of the policy is 8 per cent incentives on mobile phone exports, as well as a reduction in customs duties on the import of parts, while the import of CBUs of mobile phones and accessories such as chargers, hands-free, etc., will have higher duties.

The policy will be forwarded to the prime minister for approval. The meeting noted that there were 37 licensed mobile set manufacturers, producing 40 million mobile units annually.

Pakistan assembled 30.2m phone sets in 2025, and around 40pc were feature phones. At the same time, the maximum local consumption of phones could reach 40m sets per annum; therefore, export incentives were essential to boost the industry.

The policy also recommends establishing a dedicated Mobile & Electronics Devices Cell within the EDB to ensure effective implementation and coordination.

Published in Dawn, February 22nd, 2026

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