KARACHI: Pakistan’s top business body on Tuesday unveiled the country’s first-ever “shadow budget” ahead of the federal FY27 budget, proposing sweeping tax cuts, an export-led growth plan and a five-year roadmap aimed at lifting GDP growth to 8.5 percent and doubling exports to $80 billion.
The development comes amid Finance Minister Muhammad Aurangzeb’s consultations with business leaders, trade bodies and experts ahead of the Federal Budget 2026-27, due to be presented next month, with the government seeking proposals on industrial growth, investment promotion and fiscal reforms.
The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) said its shadow budget presented a comprehensive plan to achieve 8.5 percent gross domestic product (GDP) growth over the next five years and to increase per capita income from $1,900 dollars to $2,900.
“[It] proposed reducing GST (general sales tax) from 18 percent to 15 percent, lowering income tax on salaried individuals from 35 percent to 20 percent, bringing down interest rates and the dollar value,” the FPCCI said in a statement.
Along with the shadow budget, FPCCI President Atif Ikram Sheikh said, the business body also presented shadow economic survey, tax policy and administration reforms, and a five-year development plan.
He said they were not merely presenting recommendations, but offering a “complete, integrated, and practical alternative economic framework,” calling it a “serious” effort to define Pakistan’s economic direction.
The development came days after the International Monetary Fund (IMF) urged Pakistan to broaden its tax base and enhance spending efficiency among other measures as its mission concluded “constructive” talks with Pakistani authorities on the budget strategy for the next fiscal year.
In the shadow budget, officials of the FPCCI and the Economic Policy & Business Development think tank urged the government to increase the number of taxpayers from 3 million to 100 million, warning that the country “cannot function effectively” otherwise.
“They also proposed a 35 percent increase in the defense budget and a 23 percent increase in pensions, while recommending that the tax return form should be simplified to a single-page document,” the FPCCI said.
Pakistan’s last budget had a total outlay of Rs17.57 trillion [$62 billion] and projected economic growth at 4.2 percent, reflecting a 7 percent decrease in overall spending. The largest portion of the budget – Rs8.21 trillion ($29 billion), or nearly half of total expenditures – was allocated to debt servicing.
Another salient feature of the budget was Pakistan’s move to increase defense spending by more than 20 percent in the 2025-26 fiscal year to Rs2.55 trillion ($9.04 billion), following a four-day India-Pakistan conflict in May last year.
