Experts say Tax Ordinance will harm investment climate
They expressed their concerns during a consultative session convened on Thursday under the PILDAT Business Policy Programme. The session, chaired by former Punjab Governor Shahid Hamid, discussed the implications of the recently promulgated ordinance on Pakistan's business and investment environment. Renowned tax expert Dr Ikramul Haq delivered the keynote address and presented the detailed analysis of the Ordinance and its implications for the country in general and businesses in particular.
The session included an exchange of views on how the ordinance may affect various sectors, with participants expressing concern over the lack of prior consultation with the business community and their representative organisations, such as the chambers of commerce, the growing complexity of the tax system and the negative signals sent to potential investors.
The speakers also referenced Pakistan's persistently low tax-to-GDP ratio, hovering around 9.2 percent, and the steady decline in ease-of-doing-business rankings as indicators that more systemic and transparent tax reforms are needed. They recommended that major fiscal reforms must be thoroughly debated in the Parliament and through structured engagement with the business community before implementation. The continued practice of introducing significant economic changes through ordinances, without consultation or parliamentary scrutiny, was widely criticised for undermining business confidence and eroding investor confidence.
Serious concerns were expressed over the proposed deputation of legal and enforcement officials to business centres, which participants viewed as a reflection of the government's lack of trust in the business community. It was emphasised that such measures risk adding a new layer of potential corruption and reinforcing a perception that businesses are being treated as suspect entities under surveillance, rather than as partners in national economic development. Many participants questioned the utility and sense of deploying physical surveillance staff in this day and age of digital technology.
The session also underscored the need to invoke and strengthen the Alternative Dispute Resolution (ADR) mechanism to address tax-related issues in a transparent, amicable, and business-friendly manner, thereby reducing litigation and building trust between taxpayers and the state.
Earlier, PILDAT President Ahmed Bilal Mehboob emphasised the critical importance of stakeholder dialogue and transparency in tax reform processes. He noted that while tax reform is essential for improving revenue generation, the process must be inclusive and consultative to ensure credibility and compliance.
Copyright Business Recorder, 2025
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