Ministry of Petroleum has formally submitted a series of tax reduction and exemption proposals for the country’s mining sector to the Ministry of Finance as part of preparations for the upcoming federal budget, according to official sources.
The proposed measures are aimed at encouraging both local and foreign investment in mining and mineral exploration by lowering operational and import-related costs for companies working in the sector. However, officials said the implementation of the proposed incentives will depend on consultations with the International Monetary Fund, whose approval is considered essential under Pakistan’s ongoing economic reform commitments.
Under the recommendations submitted by the Petroleum Ministry, a significant reduction in customs duties on imported mining machinery has been proposed. Sources said the ministry wants the existing import duty rate to be slashed from 20 percent to 10 percent, while certain categories of machinery could receive up to a 50 percent concession in duties.
The ministry has also suggested cuts in income tax and corporate tax rates for mining companies in an effort to improve profitability and attract long-term investment into the sector. In addition, proposals include a reduction in sales tax, which officials believe could ease financial pressure on companies involved in mineral extraction and processing.
Government officials familiar with the discussions said the mining industry has repeatedly raised concerns over high operational expenses, including import costs, fuel prices, and inadequate infrastructure. Industry stakeholders have reportedly urged the government to introduce targeted fiscal incentives to make mining projects commercially viable and internationally competitive.
According to officials, the proposed relief package is part of a broader strategy to accelerate the development of Pakistan’s untapped mineral resources and increase exports from the sector. The government expects that lower taxation and reduced import costs could help attract new exploration projects and generate employment opportunities in mineral-rich regions.
