Islamabad: The government’s decision to shift tax policy control from the Federal Board of Revenue (FBR) to the Ministry of Finance has been met with widespread acclaim from the business sector, with many calling it a game-changing reform for Pakistan’s economy.

Industry leaders believe this move signifies a crucial shift from revenue-centric taxation to growth-focused fiscal strategies. Prominent figures, who have long championed such changes, view this as a significant step towards a more robust economic landscape.

Former Islamabad Chamber of Commerce and Industry President, Shahid Rasheed Butt, described the change as a solution to decades of inconsistent policies that hindered both local and foreign investment. He argued that focusing on collection targets instead of growth incentives had repeatedly hampered the nation’s financial progress. The new structure, he stated, offers much-needed predictability for investors.

Mr. Butt lauded the finance minister’s commitment to build the next budget around principles of economic value creation, deeming it essential for a more equitable and sustainable tax system. He also expects that the new policy direction will provide much-needed stability.

The proposed relief measures for corporations and salaried individuals have been particularly well-received. Both groups, industry representatives point out, have carried a disproportionate tax load in recent times. Mr. Butt noted that lessening the burden on these sectors will not only ease operational constraints for companies but also provide respite to the inflation-hit middle class.

He linked the reforms to overall economic stabilization attempts, stating that continued government commitment would bolster private sector involvement in the economic rebound. Recent economic indicators suggest grounds for cautious optimism, with GDP growth at 2.7 percent, a current account surplus nearing $2 billion, and a significant drop in inflation.

However, Mr. Butt cautioned that low savings and investment rates remain a vulnerability, threatening sustained expansion unless targeted reforms and improved domestic resource mobilization are implemented. The implementation of QR codes on utility bills to encourage digital payments has been applauded as a supportive initiative that could modernize the economy and decrease cash dealings.

While celebrating the policy shift, business leaders emphasize the urgent need for structural changes, including FBR restructuring and pension fund reform, to ensure lasting benefits. These institutional modifications will demand continuous political will. Mr. Butt acknowledged that it may take several years for the full impact of these reforms to be felt by ordinary citizens. He highlighted the nation’s progress from near-bankruptcy to a tentative recovery as significant, stressing the importance of sustained reform implementation.

Mr. Butt also pointed out the crucial challenges posed by climate change and population increase, urging greater private sector involvement alongside government initiatives. These policy changes are projected to enhance market sentiment by establishing clearer regulatory frameworks and diminishing ambiguity. Continued implementation of these structural changes, he suggested, could further attract foreign investment.