Mian Anjum calls for balanced fiscal policies to support growth and control inflation
\n ISLAMABAD
\nThe Federation of Pakistan Chambers of Commerce and Industry\u2019s (FPCCI) Businessmen Panel (BMP) has urged the government to revisit its revenue-generation strategy and adopt a more balanced fiscal framework that supports economic growth, industrial expansion and investment while ensuring macroeconomic stability.
\nThe panel expressed concern that the growing dependence on indirect taxation, particularly the petroleum levy, is increasing the cost of doing business, accelerating inflationary pressures and reducing the competitiveness of Pakistani industries.
\nFPCCI former president and BMP Chairman Mian Anjum Nisar said that Pakistan\u2019s economy has undergone a prolonged stabilization phase over the last several years, but the expected benefits in terms of higher growth, stronger investment and improved industrial activity have yet to materialize.
\nHe noted that despite significant fiscal adjustments and strict monetary measures, economic growth has remained below potential, while investment levels continue to remain unsatisfactory.
\nHe said that the country is currently pursuing tight fiscal and monetary policies simultaneously, which is placing excessive pressure on businesses, consumers and productive sectors of the economy.
\nWhile fiscal authorities are striving to generate higher revenues through taxes and levies, the State Bank of Pakistan is maintaining a restrictive monetary policy to control inflation. The combination of these policies, he observed, has reduced economic activity and increased the cost of financing for businesses.
\nMian Anjum Nisar pointed out that one of the major concerns for the business community is the increasing reliance on petroleum levy as a major source of federal revenue.
\nHe said that although the levy initially served as a substitute for taxes on petroleum products, it has gradually evolved into a significant revenue-generating instrument that directly affects fuel prices and transportation costs throughout the economy.
\nHe observed that fuel prices influence almost every sector, including manufacturing, agriculture, logistics, trade and services. Whenever petroleum prices rise due to higher levies, the impact is transmitted across the supply chain, increasing production costs and ultimately raising consumer prices.
\nThis process not only contributes to inflation but also reduces the competitiveness of local industries in domestic and international markets.
\nThe BMP chairman said that businesses are already facing multiple challenges, including high energy tariffs, elevated borrowing costs, regulatory burdens and declining consumer demand.
\nAdditional costs arising from indirect taxation further weaken the ability of enterprises to invest, expand operations and create employment opportunities. Small and medium-sized enterprises, in particular, are finding it increasingly difficult to absorb rising operational expenses.
\nMian Anjum Nisar stated that inflation remains one of the most serious economic challenges confronting the country.
\nHe noted that inflationary pressures are not solely driven by market demand but are also being intensified by taxation measures that increase production and distribution costs. Under such circumstances, the burden on households grows significantly, reducing disposable incomes and weakening overall economic activity.
\nHe said that higher inflation often prompts the central bank to maintain or increase policy rates to contain price pressures.
\nHowever, elevated interest rates substantially increase the cost of borrowing for businesses, discouraging investment in productive sectors. As a result, industrial growth slows down, new projects are postponed and expansion plans are delayed, affecting economic performance and employment generation.
\nAccording to Mian Anjum Nisar, the government should recognize the close relationship between fiscal and monetary policies. Both policy instruments should complement each other instead of working in opposite directions.
\nIf monetary policy remains tight to address inflationary concerns, fiscal policy should focus on reducing cost-push inflation rather than introducing additional measures that increase prices and operating costs.
\nHe emphasized that Pakistan\u2019s tax structure remains heavily dependent on indirect taxes, which place a disproportionate burden on consumers regardless of their income levels. Such taxes affect lower and middle-income households more severely and contribute to rising living costs.
\nA fair and sustainable taxation system, he added, should focus on broadening the tax base and improving compliance rather than repeatedly increasing rates on existing taxpayers and documented sectors.
\nThe BMP chairman said that the business community has consistently advocated comprehensive tax reforms aimed at simplifying procedures, reducing distortions and encouraging voluntary compliance.
\nHe stressed that the government should take effective measures to bring untaxed sectors into the formal economy and expand the number of active taxpayers. Such reforms would enhance revenue collection without imposing excessive burdens on productive economic activities.
\nMian Anjum Nisar also highlighted the need to encourage domestic and foreign investment through policy consistency and a predictable business environment.
\nInvestors require confidence in economic policies, regulatory frameworks and future market conditions before committing capital to long-term projects. Frequent increases in taxes, levies and utility costs undermine investor confidence and discourage fresh investment.
\nThe BMP chairman urged policymakers to carefully assess the inflationary impact of any proposed tax measure before implementation.
\nHe said that revenue considerations should not be viewed in isolation, as higher taxes often trigger broader economic consequences affecting inflation, competitiveness, investment and employment. A comprehensive evaluation of economic costs and benefits is essential for sound policymaking.<\/p>\n","protected":false},"excerpt":{"rendered":"
Mian Anjum calls for balanced fiscal policies to support growth and control inflation ISLAMABAD The Federation of Pakistan Chambers of Commerce and Industry\u2019s (FPCCI) Businessmen Panel (BMP) has urged the government to revisit its revenue-generation strategy and adopt a more balanced fiscal framework that supports economic growth, industrial expansion and investment while ensuring macroeconomic stability. […]<\/p>\n","protected":false},"author":2,"featured_media":522716,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-552425","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business"],"yoast_head":"\n