Tax Reform Demands Ahead of 2027 Budget 📈

• Fiscal Overview: Tax revenue reached Rs. 5.05 Trillion in 2025, up from Rs. 1.75 Trillion in 2022, with a 25.9% YoY growth in H1 2026. However, indirect taxes formed 79% of H1 2026 collections, heavily burdening lower-income households. • Household Impact: According to preliminary HIES 2025 data, average monthly household spending rose 84.1% YoY to Rs. 116,191 compared to 2019 (Rs. 63,130). Meanwhile, real spending grew by only ~15% at 2016 prices, highlighting severe inflation impact. • Sector & Commodity Demands: Calls to honor election pledges by removing the 18% VAT on school items, medicines, hospital equipment, and local ICT/BPM services. High taxes on imported vehicles—where the cumulative tax burden reaches 120% to over 300%—also face criticism. • Key Economic Policies: Experts urge replacing stacked duties with simplified rates, offering incentives to bring foreign earnings home, and easing taxes on essential sectors like healthcare, education, and IT to drive broader economic stability.