PM hints at reducing direct taxes in upcoming budget to support businesses

ISLAMABAD: Prime Minister Shehbaz Sharif on Wednesday stressed the need for reducing direct taxes “across the board” in the upcoming budget to facilitate the business community.

The premier made the remarks while addressing the inaugural session of the two-day Pakistan Governance Forum 2026, which was attended by businesspersons as well.

PM Shehbaz stressed the need for increasing economic growth, production, exports, investments and foreign direct investments (FDI), rather than relying on hiking taxes.

He said: “I believe that in the upcoming budget — which will come a few months later — we must decrease direct taxes across the board so that businesspersons and investors are facilitated.

“My entire team and I are united on this that we must reduce taxes immediately,” he said, adding that businesspeople did not pay indirect taxes.

Noting that many businesspersons sitting among the audience understood the issue he was referring to, PM Shehbaz said, “You obtain the indirect tax from the consumers. But if you keep it in your pockets, then what can be a bigger injustice to the nation?” The prime minister remarked that it was akin to a carrot and stick approach, adding that in his view “there could not be bigger injustice and oppression with the public” than keeping taxes coming from consumers in their pockets, rather than paying it to the government.

“This is why I want to tell you, without naming names, but I will name the industries: sugar, cement, tobacco,” PM Shehbaz stated.

He noted that there was an increase of Rs36 billion in tax recovery in the sugar sector in 2025 compared to 2024, and a Rs60bn increase in the cement sector during the same period.

The premier acknowledged that numerous “respected” industry leaders “honestly make payments” and pointed out that some not doing so resulted in an “unhealthy competition”.

“It has to be a whole-of-government approach in which provinces, Centre, military leadership, all of us have to work together,” he emphasised.

PM Shehbaz recalled that he held meetings with various business sectors to make decisions after consultations with them.

He asserted, “I believe that it is not the government’s duty to run businesses, […] it is that of businesspersons.

“The government’s duty is to facilitate them, to provide them whatever the government can do to support their efforts in terms of productivity, more efficiency, research and development, exports, and so forth,” he added.

“There is no lack of anything; if anything is lacking, it is will,” the premier remarked.

“Hard work, day and night, is required,” he said. “We do not have the luxury of time; we will have to act and act speedily if we want to regain our lost standing.” Staff Report