Economy Faces Tough FY25-26, LCCI Warns

Islamabad, August 17, 2025, 03:31 PM PKT — Ali Imran Asif, Senior Executive Committee Member of the Lahore Chamber of Commerce and Industry (LCCI), has sounded a stark warning, declaring that Pakistan’s economy braces for a tough year ahead in fiscal year 2025-26, fraught with serious obstacles, as reported. He noted that while the Federal Board of Revenue (FBR) has boosted revenue collection, this growth hinges on heavier taxation of existing taxpayers, not a broader tax base, exacerbating rising government expenditures and threatening the 3.9% budget deficit target under close International Monetary Fund (IMF) scrutiny.

Asif lamented that despite Pakistan’s large population and nuclear status, progress lags far behind, urging a unified, urgent push across all sectors for sustainable development, warning that overburdening documented sectors while untaxed segments persist stalls growth. Industry leaders like Muhammad Riaz from exports highlighted a shrinking industrial base due to high electricity costs, unreliable gas supply, and rupee volatility, with exports at $32 billion—well below Bangladesh’s $48 billion despite a smaller population, per economists citing high costs and an uneven tax regime. Ahmad Raza, an international trader, decried a tax system that overtaxes the compliant while ignoring the vast informal economy.

The business community calls for expanding the tax net to wholesale markets, real estate, and services, alongside cutting administrative costs and austerity in loss-making state-owned enterprises, demanding shared burden with the public sector. They advocate modern technology to track untaxed income, fostering fairness and trust, yet fears linger of a narrow tax base, reliance on indirect taxes, and an FBR fixated on IMF goals over equitable reform. Web context on economic policy shows chronic imbalances, while posts found on X reflect concern—some push reform, others doubt execution. Critically, the narrative of “economic progress” may mask structural flaws—web data hints at past failures, and X sentiment suggests distrust in sustainable change, pointing to persistent risks.