PILDAT Forum on Tax Reforms & Business Climate 2025

PILDAT convened a high-level consultative forum in Islamabad, aiming to address pressing issues related to tax reforms and the enhancement of Pakistan's business climate. On May 20, 2025, the Pakistan Institute of Legislative Development and Transparency (PILDAT) convened a high-level consultative forum in Islamabad, aiming to address pressing issues related to tax reforms and the enhancement of Pakistan’s business climate. The forum assembled prominent figures from Pakistan’s political, business, media, and civil society sectors to deliberate on structural economic challenges and propose actionable reforms for economic revival and stability. Participants at PILDAT Forum on Tax Reforms & Business Climate 2025

Key Discussions and Insights:

  • Dr. Imtiaz Ahmed, Chief Economist of Pakistan, acknowledged the government’s commitment to reform, noting that engagement with the International Monetary Fund (IMF) had constrained fiscal flexibility. He emphasized the focus on creating a more enabling environment for business despite these limitations.

  • Mr. Ahmed Bilal Mehboob, President of PILDAT, highlighted the critical need to reform the country’s tax system, advocating for a predictable and fair tax structure essential for sustainable economic growth. He urged for simplified compliance mechanisms and a greater focus on economic policy alongside political discourse.

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  • Dr. Muhammad Nasir, Head of Corporate Affairs at FrieslandCampina Engro Pakistan, raised concerns over the 18% GST on packaged milk, stating that the tax has increased consumer prices and hindered affordability. He called for policy support to formalize and stabilize the dairy value chain.

  • Mr. Muhammad H. Shafqaat, CEO of Pakistan Textile Council, identified key sectoral challenges, including delayed tax refunds, inconsistent energy pricing, and an uncompetitive tax regime. He proposed several reforms, such as a unified tax regime taxing only profits, fast-track tax refund processing within 48–72 hours, integration of EOBI, Social Security, and WWF contributions, incentives for renewable energy and SDG-aligned investments, and expanded liquidity access through DLTL, DDT, LTFF, and Export Finance Facilities.

  • Mr. Nejib ur Rahman, Advisor to the Pakistan Banks Association, highlighted the banking sector’s excessive tax burden, with effective rates reaching 54–55%, far above the national average. He called for a review of the ADR-based tax, describing it as unconstitutional and distortionary, emphasizing that banks contributed over Rs. 1.5 trillion in taxes last year and must be recognized as key fiscal stakeholders.

Parliamentary Commitments:

  • Mr. Naveed Qamar, MNA and Chairperson of the National Assembly Standing Committee on Finance, announced public hearings after the upcoming budget to ensure all stakeholders are heard. While supporting direct taxation, he acknowledged the constraints posed by the IMF programme.

  • Ms. Romina Khurshid Alam, MNA and Coordinator to the Prime Minister on Climate Change, emphasized that the 2025-26 Budget presents a vital opportunity to align climate and economic priorities. She noted that climate-compatible taxation and incentives can unlock new export markets, climate finance, and green jobs, especially for women and youth.

  • Senator Saleem Mandviwalla, Chairperson of the Senate Standing Committee on Finance and Revenue, shared that for the first time, the Senate Committee will review the budget and return recommendations to the National Assembly’s Finance Committee. He assured the forum that the concerns of the dairy, banking, and textile sectors were being duly considered.

The forum concluded with an engaging Q&A session, highlighting the depth of interest and urgency for reform.

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