Pakistan’s largest business groups have urged the International Monetary Fund (IMF) to ensure predictable, long-term economic policies, warning that uncertainty and a heavy tax burden are constraining growth and competitiveness.
The appeal came during a meeting between senior executives from around 18 major domestic and foreign corporations and IMF mission chief Iva Petrova, held on the second day of the Fund’s two-week review visit. The discussion was hosted by the Overseas Investors Chamber of Commerce and Industry (OICCI).
Focus on Taxes, Energy, and Exports
Participants said the talks centered on taxation, rising energy costs, and the urgent need to revive exports, which have declined by more than 7% in the first seven months of the current fiscal year.
Business leaders pressed the IMF to back time-bound tax incentives and other measures to boost overseas sales and attract investment. They argued that high corporate tax rates, increased levies on salaried individuals, and the controversial “super tax” are eroding profitability and weakening Pakistan’s competitive position.
IMF Urges Caution Against Rapid Expansion
According to participants, Petrova emphasized that Pakistan must pursue phased and sustainable growth to avoid slipping back into the boom-and-bust cycles that have historically destabilized the economy.
While the IMF expressed general satisfaction with progress under the ongoing reform program, concerns remain regarding tax policy and structural weaknesses in the energy sector.
Social Pressures Mount
The IMF mission’s visit comes at a time of rising social strain. A recent official report shows poverty at an 11-year high, unemployment at a 21-year high, and income inequality at a 27-year peak. The government attributes much of this hardship to tough stabilization measures implemented under the IMF-backed reform program.
Corporate representatives warned that policy inconsistency and excessive taxation are undermining business confidence. One conglomerate told the IMF delegation that various taxes and levies consume nearly 90% of its profits. Others highlighted export bottlenecks and the disadvantage faced by compliant, documented businesses due to widespread tax evasion in the informal sector.
Reform Progress — But Growth Is Key
OICCI President Yousaf Hussain noted improvements under the reform program, including fiscal consolidation, a stronger primary balance, stabilization of the external account, and rebuilding of foreign exchange reserves. He also pointed to moderating inflation, resilience in the financial sector, and recent credit rating upgrades as signs of renewed fiscal discipline and international credibility.
However, Hussain stressed that the next phase must focus squarely on growth.
“The priority now is to transition from stabilization to a phased yet sustained export-led growth path,” he said, advocating for a centrally coordinated, technocrat-backed medium-term reform strategy under a comprehensive National Economic Plan.
Call for Policy Coherence
OICCI Secretary General M. Abdul Aleem echoed the call for greater predictability and regulatory reform. He urged the government to rationalize the tax and tariff regime, avoid retrospective taxation, ensure timely refund payments, and simplify compliance procedures.
Business leaders argue that without coherent and consistent policymaking, Pakistan risks missing its geo-economic potential at a time when stability has finally begun to take hold.
