KARACHI: As the Government of Pakistan finalises the federal budget proposals for the upcoming fiscal year, Mian Zahid Hussain, Chairman Budget Advisory Council of FPCCI, President Pakistan Businessmen and Intellectuals Forum & All Karachi Industrial Alliance, Chairman National Business Group Pakistan and Chairman Policy Advisory Board FPCCI, has called for a fundamental shift in national economic policymaking.
He emphasised that the country’s long-term sustainability relies on fostering an economy-driven revenue model rather than continuing with a revenue-driven economy.
Speaking on the current macroeconomic landscape, Hussain highlighted that Pakistan’s economy has reached a critical juncture with the nominal GDP approaching Rs 110 trillion to Rs 115 trillion (USD411 billion), and initial targets for the next fiscal year propose an economic growth target of 5.1 percent.
Despite this potential, the Federal Board of Revenue (FBR) has faced a shortfall of over Rs 680 billion in the current fiscal year due to regional supply chain disruptions and import constraints.
This shortfall, he noted, is a direct result of relying on heavy taxation on a small base instead of facilitating broader economic expansion.
Mian Zahid stated that a revenue-driven economic policy attempts to bridge fiscal deficits through aggressive enforcement and higher levies on existing taxpayers. This approach ultimately stifles industrial growth, hurts domestic commerce, and encourages capital flight.
He stressed that burdening the formal sector creates an unsustainable environment where revenue collection targets are persistently missed, even as the tax targets are escalated to over Rs 15.5 trillion for the next period.
Instead, Mian Zahid advocated for a shift toward growth-led revenue generation. By focusing on the competitiveness of key export industries, reducing the cost of energy, and broadening the tax net via digitization and simplified documentation, the government can achieve sustainable prosperity.
He stressed that the government should adopt a strategy of increasing revenues through economic growth. By enhancing the competitiveness of export sectors, reducing energy costs, digitising the tax system, and simplifying documentation, the size of the economy can be expanded from USD405 billion to USD1000 billion (one trillion dollars), aligning with the vision of Prime Minister Mian Shehbaz Sharif. This approach can raise the tax-to-GDP ratio from the current 10.6 percent to a sustainable level.
Hussain urged the government to prioritise pro-growth reforms in the upcoming budget. He added that the prosperity of Pakistan’s vital SME sector and industries will naturally increase government revenues and resolve long-standing fiscal imbalances.
Copyright Business Recorder, 2026
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