Pakistan to Reduce Direct Taxes, PM Shehbaz Sharif Announces
Islamabad – Prime Minister Shehbaz Sharif has announced plans to reduce direct taxes “across the board” in the upcoming budget, aiming to facilitate the business community and stimulate economic growth. The announcement came during the inaugural session of the two-day Pakistan Governance Forum 2026, held in Islamabad on Wednesday, February 25, 2026.
Focus on Economic Growth, Not Tax Hikes
PM Shehbaz emphasized the need to prioritize increasing economic growth, production, exports, investments, and foreign direct investment (FDI) over relying on increased taxation. He stated his commitment, alongside his team, to immediately reduce taxes to support businesspersons, and investors. Dawn reported on the Prime Minister’s remarks.
Addressing Tax Evasion and Fairness
The Prime Minister highlighted the issue of indirect tax collection from consumers, questioning the fairness of businesses retaining these funds instead of remitting them to the government. He specifically mentioned the sugar, cement, and tobacco industries, noting a Rs36 billion increase in tax recovery in the sugar sector and a Rs60 billion increase in the cement sector in 2025 compared to 2024. He acknowledged that even as many industry leaders honestly make payments, some do not, leading to unhealthy competition.
Whole-of-Government Approach
PM Shehbaz stressed the necessity of a “whole-of-government approach,” involving collaboration between provinces, the center, and military leadership, to address economic challenges. The Tribune reported on this call for unified action.
Government’s Role: Facilitation, Not Operation
The Prime Minister clarified the government’s role, asserting that it is not to run businesses but to facilitate them. He emphasized providing support in areas such as productivity, efficiency, research and development, and exports. He expressed confidence that the necessary resources are available, and the primary lacking element is the will to act decisively.
Urgency and Future Outlook
PM Shehbaz underscored the urgency of the situation, stating that Pakistan does not have the luxury of time and must act swiftly to regain its lost standing. The Pakistan Governance Forum 2026 served as a platform for these discussions, with key figures including Planning Minister Ahsan Iqbal, Power Minister Awais Leghari, Petroleum Minister Ali Pervaiz Malik, IT Minister Shaza Fatima Khawaja, Information Minister Attaullah Tarar, Sindh Chief Minister Murad Ali Shah, and British High Commissioner Jane Marriot in attendance. Facebook confirmed the attendance of key figures at the forum.
The upcoming budget is expected to reflect these commitments, with a focus on reducing the tax burden on businesses to foster economic growth and attract investment.