LCCI hails government’s signal to cut taxes on formal sector

By Commerce Reporter

LAHORE — The Lahore Chamber of Commerce & Industry (LCCI) has welcomed Finance Minister Muhammad Aurangzeb’s indication that taxes on the formal sector may be reduced, calling it a timely step to boost documented businesses and strengthen the country’s industrial base.

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In a statement on Monday, the LCCI said the government’s move shows it is finally “getting down to business” by acknowledging that heavy taxation has long held back growth in the formal economy, especially in Large Scale Manufacturing (LSM). The chamber noted that recent improvements — including 4.2% year-on-year LSM growth and better output in petroleum, fertilizers, textiles, and auto parts — prove that industry performs well when given room to breathe.

LCCI expressed support for the government’s direction to reduce taxes for documented businesses, simplify the tax system under the Tax Policy Office, improve the balance of payments, encourage local production, and promote export-led and IT-driven growth.

However, the chamber urged authorities to “follow through without delay,” ensuring transparent implementation, consulting chambers before finalising reforms, ending punitive compliance practices, and offering targeted incentives for manufacturers, exporters, and SMEs.

According to LCCI, a fair and predictable tax environment will encourage investment, improve compliance, create jobs, and help Pakistan’s industry stay on its feet. The chamber reiterated its willingness to work with the Ministry of Finance and FBR to design a growth-friendly tax model aligned with global standards.