ACCA Pakistan Unveils Comprehensive Budget Proposal for Fiscal Year 2025-26

Strategic Insights -

Pakistan's fiscal reform process has received a boost with the release of ACCA (the Association of Chartered Certified Accountants) Pakistan's comprehensive Budget Proposal for the fiscal year 2025-26. The proposal, informed by extensive consultation with ACCA's Members' Network Panel and global Professional Insights reports, aims to strengthen Pakistan's taxation system and promote sustainable economic growth. Key highlights of the proposal include the establishment of an independent Tax Law Simplification Commission, a 3-5 year Tax Policy Roadmap, and a Taxpayer Engagement and Transparency Portal. The proposal also emphasizes the importance of fairness, incentivisation, digital enablement, and accountability in the taxation system.

Key Takeaways:

  • Proposal for an independent Tax Law Simplification Commission to streamline tax laws and procedures, drawing inspiration from international models like the UK's Office of Tax Simplification and India's Direct Tax Code initiative.
  • 3-5 year Tax Policy Roadmap to improve predictability, support business planning, and attract investment, based on global best practices and thought leadership.
  • Establishment of a Taxpayer Engagement and Transparency Portal to enhance openness and transparency in taxation, modelled on Canada's CRA and the UK's HMRC public consultation mechanisms.
  • Harmonised tax rates for salaried and non-salaried individuals, equitable treatment of sportspersons and professionals, and a 35% marginal tax rate for income exceeding PKR 50 million.
  • Targeted tax relief for IT and AI-based RandD, green economy investment, and documented trade, similar to Section 65A restoration.
  • Expansion of mandatory e-filing and POS integration, with support from global examples like Estonia's e-Tax Board and India's AI-driven tax audits.
  • Dispute Resolution Reform, including the reinstatement of judicial neutrality by appointing tribunal members through the Federal Public Service Commission (FPSC).
  • Establishment of an Independent Tax Oversight Body, modelled on TIGTA (US) and Australia's Inspector-General of Taxation, to promote accountability.

Statistics:

  • 35% marginal tax rate for income exceeding PKR 50 million.
  • Proposed 3-5 year Tax Policy Roadmap to improve predictability and attract investment.
  • Expansion of mandatory e-filing to increase transparency and efficiency in taxation.
  • Establishment of a Taxpayer Engagement and Transparency Portal to enhance openness in taxation.

Sources:

  • [ASSAD HAMEED KHAN, "Head of ACCA Pakistan", according to the ACCA Pakistan Press Release]
  • [AUCKY PRATAMA, "Executive Director - Asia Pacific, ACCA", according to the ACCA Pakistan Press Release]
  • [HAROON A JAN, "Head of Member Engagement ACCA", according to the ACCA Pakistan Press Release]
  • [ACCA Pakistan's Budget Proposal for Fiscal Year 2025-26, Press Release]