KP Slashes Infrastructure Development Cess To 0.75%

The Government of Khyber Pakhtunkhwa has approved a substantial reduction in the provincial Infrastructure Development Cess (IDC), lowering the levy from 2% to 0.75% in response to long-standing concerns raised by the business community ahead of the FY2026-27 provincial budget.

The announcement was made by Muzammil Aslam during a high-level pre-budget consultation session attended by representatives of chambers of commerce, business associations, and senior government officials from across the province.

Business stakeholders have consistently advocated for a reduction in the IDC, arguing that the levy increases operational costs, raises the overall cost of doing business, and negatively impacts the competitiveness of local industries and commercial enterprises.

The consultative meeting formed part of the provincial government’s engagement with the private sector to obtain feedback and recommendations prior to finalisation of the provincial budget.

Among the business representatives attending the session were Haji Muhammad Yousuf Afridi, Syed Jawad Hussain Kazmi, Wajid Ali Shinwari, Hazrat Ali Shinwari, Ali Faisal, Inam Khan, Haji Rashid Ahmed Paracha, and Qurtul Ain.

The meeting was also attended by senior provincial officials, including Muhammad Ishaq, Salahuddin, Muhammad Tawfiq, and Syedul Amin.

Participants discussed a range of budgetary proposals, taxation matters, and concerns affecting the business sector, with particular emphasis on measures aimed at improving the investment climate and reducing the financial burden on businesses operating within the province.

The reduction in the Infrastructure Development Cess is expected to provide relief to commercial and industrial stakeholders by lowering transaction costs and supporting business activity as the provincial government finalises its fiscal policy framework for FY2026-27.