Commerce Desk
KARACHI :: Mian Zahid Hussain, President Pakistan Businessmen and Intellectuals Forum & All Karachi Industrial Alliance, Chairman National Business Group Pakistan, Chairman Policy Advisory Board of FPCCI, and Former Provincial Minister of Sindh for Information Technology, has expressed deep concern over the emerging news regarding the upcoming federal budget for the fiscal year 2026-27. He urged the government that after achieving economic stability, the national economy must now be steered toward a sustainable, growth-oriented path rather than running it on the traditional mechanism of merely increasing taxes and revenue. He noted that under strict IMF conditions, proposing a federal revenue target of 17.1 trillion rupees (17.145 Trillion) for FY 2026-27, a one percent increase in the sales tax rate, and a heavy increase of up to 20 percent in the FBR tax targets reflects that preparations are being made to place the entire burden of the budget onto existing taxpayers and industries once again.
Mian Zahid Hussain warned that if the direction of economic policies is not shifted toward productivity, exports, and industrial growth, business activities in the country will become completely paralyzed. Comparing economic data, Mian Zahid Hussain pointed out that although inflation has decreased and come down to single digits, the continuous stagnation of GDP growth targets remains alarming. The government’s decision to set the GDP growth target between 3.5 to 4.2 percent for the next fiscal year clearly indicates that Pakistan will not be able to achieve a five and a half or six percent growth rate next year either. Economic growth targets can never become a reality until relief is provided on import duties on raw materials, high energy prices, and heavy bank markup rates.
Mian Zahid Hussain stated that the expected increase in the petroleum levy under IMF pressure will lead to a rise in inflation and an unbearable increase in the cost of doing business. He emphasized that Pakistan is currently in dire need of a growth-oriented policy instead of a revenue-driven economy because the indiscriminate increase in tax rates and new taxes is halting the industrial wheel, which in the long run is reducing the government’s own revenue compared to the actual size of the economy.
Mian Zahid Hussain advised the government that instead of restricting the 1.1 trillion rupee Public Sector Development Programme (PSDP) solely to infrastructure, it should link it with incentives for the IT, agriculture, and manufacturing sectors to generate real employment. He added that economic stability is only possible when the tax net is widened to bring untaxed sectors like agriculture and retail into the fold, and the burden on the manufacturing sector is reduced; otherwise, Pakistani exports will be completely knocked out of the competition compared to other countries in the region.
Mian Zahid Hussain further stated that in today’s civilized world, the formula of ending tax evasion and bringing undocumented sectors into the tax net through crackdowns, raids, registration blocking, blacklisting, and harassment under tax laws has completely abandoned. For the improvement of the economy, growth, investment climate, and increase in FDI, it is essential to make tax laws simple, soft, and business-friendly, while the economy must be digitalized end-to-end to increase tax revenue and prevent tax evasion, which could potentially increase the Tax-to-GDP ratio from the current 10 percent to 15 percent.
