In a significant move to stimulate business activity and attract foreign direct investment (FDI), the federal government has prepared a wide-ranging reform package aimed at protecting industries and the private sector from harassment.

The proposed measures include full digitalization of sales tax processes, legal safeguards for investors, and limits on the intervention of regulatory bodies.

The government has decided to completely digitalize all sales tax processes to ensure transparency and reduce human interference.

According to official documents obtained by Samaa TV, fines and surcharges on one-time return revisions will be abolished as part of the reform package.

Authorities say these steps are intended to simplify compliance and reduce unnecessary pressure on businesses.

Proposal to limit regulatory interference

The Ministry of Industries and Production has recommended exempting foreign investments coming through legal channels from further scrutiny.

It has also proposed preventing unnecessary interference by institutions such as the Federal Board of Revenue (FBR), National Accountability Bureau (NAB), and Federal Investigation Agency (FIA).

In addition, funds coming from financial institutions not listed on the Financial Action Task Force (FATF) grey list should not face further examination.

A penalty of 30 days imprisonment or a fine of Rs1 million has been proposed for illegal interference in business matters.

Protection for foreign investors

The reform package includes a proposal to protect foreign investors from arrest and confiscation of funds.

Officials say the Prime Minister’s Office may be granted authority to safeguard foreign direct investment, ensuring that genuine investors are protected from undue action.

Amendments have also been proposed to the Securities and Exchange Commission of Pakistan (SECP) laws. Under the proposal, SECP approval would be mandatory before taking action against regulated entities.

Relief in tax and audit procedures

The government has recommended automatically suspending tax recovery once an appeal is filed. A risk-based system for withholding tax audits has also been proposed to minimize arbitrary assessments.

Additionally, minor tax errors may be removed from the list of criminal offences to reduce the fear of prosecution for small compliance mistakes.

To encourage transparent decision-making, it is proposed to provide legal protection to regulators and government officials for actions taken in good faith.

Officials say these reforms are designed to rebuild investor confidence, promote economic growth, and position Pakistan as a more business-friendly destination.