Engagement with IMF team: PBC acknowledges gains in inflation, fiscal discipline

KARACHI: The Pakistan Business Council (PBC), in a meeting with the visiting delegation of the IMF, has acknowledged improvements in inflation control and fiscal consolidation under the ongoing Board programme, but stressed that macroeconomic stabilisation must now deliver tangible economic gains.

The PBC also called for abolishing the super tax, gradually cutting the corporate tax rate to 25 percent, and rationalizing advance and withholding taxes that effectively function as minimum taxes.

A delegation of the PBC, led by its Chairperson Dr Zeelaf Munir, met with the visiting IMF mission headed by Ms. Iva Petrova, Head of Mission to Pakistan, andMahir Binici, Resident Representative, to discuss Pakistan’s transition from macroeconomic stabilization toward durable, export-led growth.

During the meeting, acknowledging improvements in inflation and fiscal consolidation under the current programme, the PBC delegation noted that stabilization must now translate into investment, productivity and employment generation. With the policy rate at 10.5 percent and a primary surplus recorded, the discussion focused on structural measures required to unlock private sector confidence.

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Tax rationalization formed a central part of the engagement. The delegation highlighted that the current structure places a disproportionate burden on compliant and documented enterprises. The continuation of the super tax across income, dividends and capital gains, along with extensive advance and withholding tax regimes, has elevated effective corporate taxation at a time when Pakistan requires export expansion and industrial scaling.

Consistent with the reform roadmap presented during the session, PBC called for the abolition of the super tax in all its forms, phased reduction of the corporate tax rate to 25 percent, and rationalization of advance and withholding tax regimes that act as de facto minimum taxes. The Council reiterated that the tax base must be broadened rather than deepened, with stronger enforcement to bring untaxed segments into the net.

The discussion also underscored the importance of policy consistency. Frequent shifts in tax, energy and regulatory frameworks delay capital deployment and constrain export growth. A credible, multi-year fiscal and energy roadmap would anchor long-term investment decisions.

Energy competitiveness was also discussed. High and volatile industrial tariffs, along with sectoral distortions in agriculture and food value chains, continue to impede value addition and export diversification. PBC emphasized that fiscal space created through stabilization should increasingly support productivity-enhancing and job-creating industry.

Dr. Zeelaf said that stabilization has provided breathing space. The priority now is institutionalizing growth. A competitive and equitable tax framework, predictable energy pricing and policy consistency are essential to expand exports, attract investment and generate employment at scale. The private sector stands ready to deploy capital where reform signals remain clear and credible, she added.

The engagement forms part of PBC’s ongoing structured dialogue with policymakers and multilateral institutions aimed at strengthening Pakistan’s competitiveness and converting stabilization into sustainable economic expansion.

Copyright Business Recorder, 2026