Business community leader assails ‘unpredictable’ tax policies’

KARACHI: The Chairman of the National Business Group Pakistan, the President of the Pakistan Businessmen and Intellectuals Forum, the President of the All Karachi Industrial Alliance, the Chairman of the FPCCI Advisory Board, Mian Zahid Hussain has said that the business community is currently upset by unpredictable and inconsistent tax policies, which are discouraging both domestic and foreign investment.

If the government truly wants meaningful economic recovery, it must urgently take steps to expand the economic base and tax net, reduce production costs, and ensure that the tax burden is shared fairly among all citizens. Otherwise, the ongoing crisis will only get worse.

He stated that the pace of tax reforms is still disappointing.

He explained that resistance to the digital economy is adding to the growing tax burden on the poor, making their lives harder. He pointed out that current economic policies are worsening unemployment and poverty nationwide.

Mian Zahid Hussain said that strict fiscal and monetary policies have heavily impacted industrial activity, job opportunities, and consumers’ purchasing power. According to the World Bank, Pakistan’s poverty rate has hit 40.5 percent, with unemployment at around 22 percent, revealing the real challenges behind ongoing reforms.

He highlighted that 75 to 80 percent of the Federal Board of Revenue’s (FBR) revenue comes from withholding taxes, which are technically indirect taxes.

These taxes place a disproportionate burden on salaried and middle-income groups already struggling with inflation, high electricity costs, and rising interest rates.

He added that the business and industrial communities harbour strong concerns over the powers granted to FBR officers under the Finance Bill 2025.

Mian Zahid Hussain warned that, in pursuit of the Rs 14,300 billion tax target, the government must not jeopardize the country’s Rs 123,000 billion economy. Instead, efforts should focus on expanding the overall economic base, which would naturally increase tax revenues.

He stressed that genuine tax reform is not about further burdening current taxpayers but about expanding the tax base. Without including the country’s large informal economy in the tax system, achieving the 13% tax-to-GDP ratio sustainably is unlikely.

For long-term progress, Mian Zahid Hussain stressed the crucial need for transparency, fairness, and accountability to be incorporated into the tax system.

Copyright Business Recorder, 2025