Business Leaders Demand Radical Tax Reform
Two former presidents of commerce chambers have called for outsourcing the Federal Board of Revenue (FBR) and shifting the tax system to artificial intelligence. Speaking at a session organised by the Businessmen Panel, former Federation of Pakistan Chambers of Commerce and Industry (FPCCI) president Nasir Hayat Magoon said the FBR has 36,000 employees, of whom 15,000 are solely engaged in issuing notices. 'In Dubai, no investor has ever met a tax officer. In Pakistan, it's not the people but the system that is flawed,' he said, urging the government to fix the tax system and hand it over to AI.
Criticism of Economic Policies and IMF Role
Magoon added that the finance minister, a banker, claims economic stability based on loans, and that Rs853 billion under the Benazir Income Support Programme is turning people into beggars. He claimed the International Monetary Fund (IMF) has pushed the poverty rate from 25% to 50% in three years. 'It would have been better if the country had defaulted – people would have been forced to work. The country cannot run like this,' he said.
Textile Industry and Trade Deficit Woes
Former FPCCI president Zakaria Usman said the FBR throws business representations into the trash. He pointed out that the textile industry runs 60% on imports, and without import-substitution industries, the trade deficit cannot be reduced. He added that commercial banks prefer lending to the government instead of industry, with half the budget going toward interest payments. He stressed the need for a five-year policy framework, security and import-substitution to spur industrialisation. 'Without industry, there will be no jobs, and crime will not decline,' he said.
Cotton Output and Tax Rates Impact
Due to untimely fertiliser supply, cotton output fell by five million bales. High tax rates, he said, are crippling the productive sector. He added that it appears the government does not want to exit the IMF programme. 'Pakistan's global position is strong – it should be leveraged,' he said, adding that educated youth should be retained within the country rather than sent abroad for remittances.
Think Tank Highlights Stagnant Growth
Engineer MA Jabbar, head of the BMP Think Tank, said the budget shows no positive progress for industrial growth, nor has the economy stabilised. He said the economy is relying more on consumption and imports, with a $35 billion trade deficit. While remittances are rising, exports remain stagnant. He demanded an end to discriminatory tax policies, smuggling and tax exemptions. He added that poverty has exceeded 40% in Pakistan, with 37% of Sindh's population living in poverty. He noted that the financial sector has transferred $600 million out of Pakistan, questioning how industrialisation can occur when capital is not invested domestically.
Former KCCI President on Economic Paralysis
Former Karachi Chamber of Commerce and Industry (KCCI) president Shariq Vohra said that while macroeconomic indicators have improved, high tax rates have paralysed the economy. He noted that industrialists may evade taxes, but salaried individuals are helpless. In his view, the government has taken no meaningful steps to reduce poverty. He added that foreign direct investment has declined due to low business confidence, law and order concerns and high energy costs. However, he expressed hope that a potential Iran-US peace agreement could improve business confidence. He noted that Pakistan's population growth rate stands at 2.5%, while GDP growth is below 4%. Given shifting geopolitical dynamics, he said Pakistan has significant opportunities to capitalise on.
