On June 10, 2025, the federal government unveiled the much-anticipated annual budget, only to be met with widespread rejection from the country’s business community. Business chambers across Pakistan have strongly criticized the budget, calling it regressive, unjust, and riddled with hidden taxes. Their concerns highlight a growing disconnect between policymakers and the realities faced by taxpayers and common citizens alike.
At the heart of the criticism lies the Federal Board of Revenue’s (FBR) approach to taxation. Instead of expanding the tax net and bringing non-filers into the system, the government appears to have doubled down on squeezing those who are already compliant. This has led to frustration among registered taxpayers, especially businesses that already contribute significantly to the national exchequer. While these contributors are burdened further, those operating outside the FBR’s reach continue to evade their responsibilities, escaping without consequence.
A major demand from business leaders is the implementation of the Point of Sale (POS) system across all commercial outlets, regardless of size. This would ensure proper documentation and help widen the tax base — a necessary step toward a fair and sustainable economic model. However, the government has once again failed to enforce this system comprehensively, allowing the informal economy to thrive unchecked.
In another blow to fairness, the budget has reportedly increased taxes on small cars — a move that will hurt the middle class disproportionately. At a time when inflation is already eating into household incomes, the decision to further tax affordable transportation adds insult to injury. The salaried class received marginal relief, but the average citizen — the common man — was left out entirely. Prices of essential items continue to rise, and no tangible steps have been announced to control inflation or stabilize the economy.
Equally troubling is the glaring inequity in tax exemptions. Certain enterprises and conglomerates, particularly those linked to powerful forces, have allegedly been granted exemptions — a pattern that reeks of favoritism. This not only undermines the principle of tax justice but also deepens public distrust in the system.
Moreover, macroeconomic indicators offer little cause for optimism. The Pakistani rupee continues to slide, with the dollar exchange rate at an all-time high, putting additional pressure on imports and domestic prices. Despite government rhetoric, exports remain stagnant, reflecting deeper structural issues that the budget fails to address.
In sum, this budget is seen not as a roadmap to economic recovery, but as a missed opportunity. It ignores the urgent need to broaden the tax base, fails to address inflation, and offers no meaningful relief to the masses. If the government truly wants to stabilize the economy and foster public confidence, it must engage with stakeholders, embrace transparency, and introduce bold structural reforms — not burden the honest while shielding the privileged.
Without these corrective steps, the gap between the governed and the government will only widen — and the cost of such disconnection will be paid not just in rupees, but in public trust.
