KARACHI: President of Korangi Association of Trade and Industry (KATI) Junaid Naqi has welcomed the International Monetary Fund’s (IMF) decision to reduce Pakistan’s tax target by Rs620 billion, saying that the move will provide relief to the economy and support industrial growth.
He noted that the IMF’s decision to lower the tax target from Rs12.97 trillion to Rs12.35 trillion reflects the urgent need for economic stabilisation in Pakistan. The Rs600 billion revenue shortfall over the past eight months had placed undue pressure on industries, and this adjustment will offer some relief to the business community.
Naqi further added that while maintaining the tax-to-GDP ratio at 10.6 per cent is a positive step, the government must expand the tax net and implement business-friendly policies to enhance economic activity. He also welcomed the expected decline in inflation, noting that while the forecast reduction from 12.5 per cent to 7.0 per cent is encouraging, its true benefit will only be realised if production costs decrease and raw material prices stabilise.
The KATI president urged the government to prioritise industrial growth in its negotiations with the IMF and refrain from introducing new taxes or mini-budgets, which could disrupt business stability and investment.
Despite the economic challenges, Naqi acknowledged the government’s decision to maintain the development budget as a positive step. However, he stressed that any reduction in overall government expenditure should be carefully implemented to avoid negatively impacting industrial production and exports.
He expressed hope that Pakistan will safeguard its economic interests in ongoing discussions with the IMF and adopt policies that drive industrial growth and economic stability. He advised the government to expand the tax net through comprehensive tax reforms, targeting untapped sectors rather than further burdening existing industrialists.