The American Chamber of Commerce (AmCham) has put forward wide-ranging tax reform proposals during pre-budget discussions for the 2026–2027 fiscal year, urging policymakers to prioritise a more efficient, predictable, and growth-oriented tax system.
The recommendations were presented at a high-level consultation held at the National Board of Revenue (NBR) headquarters, where government officials and key business stakeholders gathered to shape fiscal policy directions ahead of the FY27 budget.
AmCham emphasised that while the economy has recorded notable progress in recent years, the country’s revenue framework has not evolved at the same pace. This gap, according to the chamber, is limiting the ability to support a modern, investment-driven economy.
A major concern raised was the low level of active tax compliance. Although many individuals and businesses are registered taxpayers, only about one-third are filing returns, highlighting a significant disconnect between registration and actual participation in the tax system.
The chamber also pointed out that a large share of government revenue is derived from indirect taxes, which tend to place a heavier burden on consumers. It argued that this structure raises concerns about fairness and sustainability, calling for a stronger focus on expanding direct taxation.
Key Reform Proposals
AmCham’s recommendations focused on several core areas aimed at improving compliance and boosting investor confidence:
Policy stability and predictability: The chamber stressed the need for consistent tax policies, including clarity on tax rates, incentives, and exemptions, to support long-term investment decisions.
Simplification of the tax system: It called for reducing overlapping taxes, eliminating double taxation, and reviewing minimum tax rules to lower the cost of doing business.
Improved tax administration: Suggestions included simplifying procedures, reducing unnecessary documentation, and strengthening VAT refund mechanisms to enhance efficiency.
Digitalisation of tax processes: AmCham highlighted the importance of expanding electronic payments, encouraging cashless transactions, and investing in digital infrastructure to improve compliance and reduce informality.
Customs and trade reforms: The chamber proposed modernising customs operations through digital clearance systems, transparent valuation methods, and more efficient port processes to reduce delays and costs.
Beyond technical reforms, AmCham underscored the importance of building trust between taxpayers and authorities. It argued that compliance should be driven by transparency, simplicity, and fairness rather than enforcement alone.
The chamber also welcomed ongoing efforts to separate tax policy from tax administration, describing it as a positive step toward improving governance and accountability in the revenue system.
The proposals reflect a broader push to widen the tax base without increasing tax rates, improve ease of doing business, and align revenue mobilisation with economic growth. By focusing on simplification, digitalisation, and policy consistency, AmCham believes the reforms can enhance competitiveness, attract investment, and ensure a more sustainable fiscal framework.
As the FY27 budget process progresses, these recommendations are expected to play a key role in shaping discussions on how to modernise the tax system and strengthen revenue generation while supporting economic development.
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