Senior business figures and former presidents of the FPCCI have proposed major reforms in Pakistan’s tax administration, including outsourcing the Federal Board of Revenue (FBR) and shifting the entire tax system to artificial intelligence.
Speaking at a session on the federal budget and its impact on the economy under the Businessmen Panel, former FPCCI President Nasser Hyatt Magoon said the government should consider outsourcing FBR instead of other state institutions like airports.
He argued that the real issue lies in the tax system rather than manpower, claiming that a large portion of FBR staff is engaged mainly in issuing notices. He said modernizing the system through AI-driven automation could improve efficiency and transparency.
Magoon also criticized government economic policies, alleging that the system itself encourages inefficiencies. He said reliance on borrowing for stability is unsustainable and raised concerns over the structure and scale of welfare spending, claiming it increases dependency instead of reducing it.
He further stated that Pakistan has seen a sharp rise in poverty, which he linked to international financial programs and domestic policy choices, arguing that structural reform is urgently needed.
Former FPCCI President Zaki Ahmed Usman said the tax authority does not respond effectively to business community input. He highlighted structural weaknesses in the economy, noting that the textile sector heavily depends on imported inputs, which limits competitiveness.
He added that banks are more inclined to finance government borrowing rather than the industrial sector, placing pressure on fiscal resources as debt servicing consumes a large share of the budget. He called for a stable, long-term industrial policy, improved security conditions, and a shift toward import substitution to strengthen local production and employment.
Usman stressed that domestic investment must increase to attract foreign capital and warned that high tax rates are discouraging productive economic activity.
BMP Think Tank head Engineer M.A. Jabbar said the federal budget offers little support for industrial expansion and lacks a long-term growth strategy.
Former Karachi Chamber of Commerce President Shariq Vohra also criticized the tax burden, saying it has slowed economic activity and called for increased investment to reduce poverty and revive growth.
