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

Strategic Insights -

The Association of Chartered Certified Accountants (ACCA) Pakistan has released its detailed Budget Proposal for the fiscal year 2025-26, which aims to strengthen Pakistan's taxation system and promote economic growth. The proposal, developed over a decade of engagement with Pakistan's fiscal reform process, incorporates insights from ACCA's Professional Insights reports and extensive consultation with its Members' Network Panel, comprised of finance professionals from leading firms and industries across the country.

Key Takeaways:

  • The proposal advocates for the establishment of an independent Tax Law Simplification Commission to streamline tax laws and regulations.
  • A 3-5 year Tax Policy Roadmap is proposed to improve predictability and support business planning, with recommendations for harmonized tax rates for salaried and non-salaried individuals.
  • The proposal recommends the creation of a Taxpayer Engagement and Transparency Portal to enhance openness and transparency in tax administration.
  • Targeted tax relief is proposed for IT and AI-based R&D, green economy investment, and documented trade to incentivize economic growth.
  • Digital enablement is recommended through the expansion of mandatory e-filing and POS integration, inspired by global examples like Estonia's e-Tax Board and India's AI-driven tax audits.
  • A structured roadmap is proposed for the three most urgent reforms: Tax Law Simplification, Policy Certainty, and Real Estate Valuation Reform.
  • The proposal incorporates insights from global tax experts and ACCA's Professional Insights reports, highlighting the importance of international best practices in tax administration.
  • ACCA Pakistan is willing to work alongside public institutions, businesses, and civil society to support a fiscally sustainable and investment-friendly environment.

Statistics:

  • The proposed Tax Policy Roadmap aims to improve predictability and support business planning over a 3-5 year period.
  • The recommended harmonized tax rates for salaried and non-salaried individuals aim to promote fairness and equity in taxation.
  • The proposed tax relief for IT and AI-based R&D, green economy investment, and documented trade aims to incentivize economic growth in targeted sectors.
  • The expansion of mandatory e-filing and POS integration is expected to enhance digital enablement and streamline tax administration.

Sources:

  • Association of Chartered Certified Accountants (ACCA) Pakistan
  • ACCA's Members' Network Panel
  • ACCA's Professional Insights reports
  • Government of Pakistan
  • International organisations like the UK's Office of Tax Simplification, India's Direct Tax Code initiative, and Canada's CRA.