A recent consultative session brought together a diverse group of businessmen, legal experts, tax specialists, and journalists who voiced strong concerns that the recently promulgated Tax Laws (Amendment) Ordinance 2025 is likely to negatively impact the country’s business and investment environment. Contrary to government expectations, participants felt the ordinance would not yield significant tax collection benefits and could cause considerable harm.
The discussion took place on Thursday during a session organized under the PILDAT Business Policy Programme. Chaired by former Punjab Governor Shahid Hamid, the session focused on analyzing the potential implications of the new ordinance for businesses and the broader economy. Renowned tax expert Dr. Ikramul Haq delivered a detailed keynote address, providing his analysis of the ordinance’s potential effects.
Participants engaged in a robust exchange of views, expressing particular apprehension over several aspects of the new law. A key concern raised was the perceived lack of prior consultation with the business community and its representative bodies, such as chambers of commerce. The increasing complexity of the tax system, exacerbated by such unilateral changes, was also highlighted as a negative factor.
The session also underscored the negative signals the ordinance sends to both domestic and potential foreign investors, potentially deterring much-needed investment.
Referencing Pakistan’s persistent low tax-to-GDP ratio, which remains around 9.2 percent, and the country’s declining rankings in ease-of-doing-business indices, speakers argued that the current approach is counterproductive. They stressed that these indicators point to a need for more systemic and transparent tax reforms, rather than hasty amendments via ordinance.
The practice of introducing significant economic legislation through ordinances, bypassing parliamentary debate and structured engagement with stakeholders, was widely criticized for undermining business confidence and eroding investor trust.
Serious reservations were also expressed regarding the proposed provision allowing the deputation of legal and enforcement officials to business centers. Participants interpreted this measure as a reflection of the government’s lack of trust in the business community. Concerns were raised that this could introduce a new layer of potential corruption and reinforce a perception of businesses being under constant surveillance rather than being treated as partners in national economic development. Many questioned the practical utility of deploying physical surveillance staff in the current digital age.
The session also emphasized the critical need to utilize and strengthen the Alternative Dispute Resolution (ADR) mechanism. Participants argued that a robust ADR process is essential for resolving tax-related issues in a transparent, amicable, and business-friendly manner, which would help reduce protracted litigation and build trust between taxpayers and the state.
Earlier in the session, PILDAT President Ahmed Bilal Mehboob highlighted the crucial importance of stakeholder dialogue and transparency in the tax reform process. He stated that while improving revenue generation through tax reform is vital, the process must be inclusive and consultative to ensure both credibility and better compliance from taxpayers.
