ISLAMABAD: Prominent business leaders and former presidents of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) have urged the government to modernize Pakistan’s tax system by introducing artificial intelligence (AI)-driven tax collection and outsourcing the Federal Board of Revenue (FBR).
Speaking at a Businessmen Panel session on the federal budget and its impact on the economy, former FPCCI President Nasser Hyatt Magoon said the government should focus on outsourcing the FBR instead of state-owned assets such as airports.
Call for AI-Driven Tax Administration
Magoon argued that Pakistan’s tax administration suffers from systemic issues rather than personnel shortcomings. He claimed that a significant portion of FBR’s workforce is primarily engaged in issuing tax notices, which reflects inefficiencies in the existing system.
According to him, the country should reform its tax structure and transition toward an AI-powered automated tax collection mechanism to improve transparency, reduce human intervention, and curb corruption.
He further alleged that the current system creates opportunities for corruption and questioned claims of economic stability, arguing that they are heavily dependent on external borrowing.
Criticism of Welfare Spending and Economic Policies
The former FPCCI chief also criticized the Benazir Income Support Programme, stating that the allocation of Rs. 853 billion under the program is fostering dependency rather than economic empowerment.
Magoon claimed that rising poverty levels have accompanied recent economic stabilization efforts and expressed concerns over the long-term impact of policies linked to international financial assistance programs.
Industry Faces Challenges Amid High Taxes
Former FPCCI President Zaki Ahmed Usman said the business community’s recommendations are often overlooked despite being submitted in writing to the FBR.
He highlighted that Pakistan’s textile sector relies heavily on imported raw materials, estimating that around 60 percent of inputs are sourced from abroad. He argued that reducing the trade deficit requires the development of import-substitution industries and stronger support for domestic manufacturing.
Usman also noted that commercial banks prefer lending to the government rather than providing financing to industries, limiting business growth and investment opportunities.
Demand for Long-Term Industrial Policy
The business leader emphasized the need for a comprehensive five-year industrial policy to revive manufacturing, create jobs, and strengthen economic growth. He stressed that improving the security environment and promoting import-substitution strategies are essential for industrial expansion.
Usman warned that excessive taxation is increasing production costs and reducing the competitiveness of local industries. He also called for greater efforts to attract investment, stating that strong domestic investment is a prerequisite for drawing foreign investors.
Concerns Over Brain Drain and IMF Dependence
The speakers expressed concern over the growing trend of skilled professionals leaving Pakistan in search of better opportunities abroad. They urged policymakers to create an environment that encourages talent retention and industrial development.
The business community representatives also called for reducing reliance on international bailout programs and leveraging Pakistan’s strategic economic position to achieve sustainable growth and long-term economic stability.