ISLAMABAD: The government has taken several steps to facilitate the export sector and reduce human intervention in tax administration. These include reducing tax deduction on export earnings and making the Federal Board of Revenue’s audit and assessment system faceless.
Minister of State for Finance and Revenue Bilal Azhar Kayani, while talking to business representatives at the Lahore Chamber of Commerce and Industry, said that tax deduction on export earnings has been reduced from 2 per cent to 1.25 per cent. This reduction has also been confirmed in the FBR’s budget document to encourage exports.
The government has also provided relief to the business sector in the matter of super tax. Super tax has been abolished for individuals and institutions with annual income up to Rs 500 million. The rate for companies with income above this has been reduced from 10 per cent to 8 per cent; however, certain specific sectors are exempted from these incentives.
The proposed faceless model in tax administration is being described as an important part of the reforms. The new system will leverage technology, tax returns and other available information for audit and assessment. The aim is to reduce individual discretion in case selection and processing.
The Finance Act 2026 also provides for certain audit and assessment operations through the National Faceless Center. This system provides the basis for handling tax matters digitally.
The faceless system is also being taken forward in customs. The government says that reducing direct contact between officers and business people can improve transparency. This is also expected to help reduce unnecessary delays and interference in the clearance process.
Special FBR centres have also been set up in export hubs to facilitate businesspeople. Major industrial cities, including Karachi, Lahore, Faisalabad and Sialkot, have been included in this system, while the process of extending the facility to other areas is underway.
The government has also introduced a simplified and optional tax scheme for small traders. According to officials, the vendors involved will be facilitated with some normal conditions. However, if there is an unusual financial discrepancy, the FBR will be able to conduct an audit through its digital system.
The government maintains that making the tax system more user-friendly and technology-based is the main objective of the reforms. The reduced deductions and the fee-free system for the export sector are part of the effort to improve the business environment. However, the real impact of these measures will depend on transparent implementation, efficiency of the system and taxpayer confidence.
