Financial experts have urged policymakers to broaden Pakistan’s tax base and reduce tariff distortions as part of wider economic reforms.
The recommendations were shared during a pre-budget consultation session focused on fiscal priorities for the upcoming 2026–27 budget.
Participants stressed that Pakistan’s economic framework continues to rely heavily on short-term stabilisation measures rather than long-term structural reforms.
They argued that this approach has deepened poverty, widened inequality, and increased vulnerability to climate-related risks.
Shift Toward Human Development and Climate Resilience
Experts highlighted the need to prioritise human development, climate resilience, and productive investment in national planning.
They called for increased spending on education, healthcare, nutrition, and social protection systems.
In addition, they recommended expanding investment in climate adaptation, disaster preparedness, and early warning systems.
One key concern raised was the repeated cost of recovery after floods, droughts, and heatwaves.
As one expert stated, “The country cannot continue financing recovery after every flood, drought and heatwave while underinvesting in prevention, preparedness, anticipatory action and human development.”
Social Spending Viewed as Economic Investment
Officials emphasized that social sector spending should be treated as an investment rather than a financial burden.
They argued that well-targeted social protection programs can improve productivity and strengthen long-term economic stability.
There was also a strong call for increased public investment in agriculture, small and medium enterprises, and emerging green sectors.
These sectors were identified as key drivers of job creation and inclusive economic growth.
Tax Base Expansion and Relief for Salaried Class
A major focus of the discussion was taxation reform and fairness in revenue collection.
Experts warned against placing additional pressure on salaried individuals, who already contribute a significant share of direct taxes.
They noted that large segments of the informal economy remain outside the tax net, creating imbalance in the system.
One researcher stated that policy reforms should prioritise broadening the tax base instead of increasing burdens on middle-income households.
He added that improving productivity and compliance would generate more sustainable revenue.
Calls for Tariff Rationalisation and Export Growth
Economists also supported efforts to rationalise tariffs to improve industrial competitiveness.
They argued that reducing tariff distortions could help attract investment and strengthen export-led growth.
It was suggested that Pakistan needs long-term structural reforms instead of repeated short-term revenue adjustments.
Experts also warned that excessive reliance on indirect taxation reduces purchasing power and slows economic activity.
Climate Budgeting and Policy Consistency
Specialists highlighted the importance of integrating climate risks into fiscal planning and development spending.
While climate budget tagging was welcomed, concerns were raised that it should not become a procedural exercise without real impact.
One expert stated, “Climate budget tagging must be inclusive, not just a box-ticking activity,” stressing the need for meaningful integration.
They also called for stronger incentives for renewable energy investment and warned against inconsistent policy signals that could discourage clean energy development.
Budget as a Development Strategy
Experts concluded that the national budget should be viewed as a long-term development roadmap rather than a simple accounting tool.
They urged policymakers to align fiscal decisions with job creation, human capital development, and sustainable growth objectives.
The overall message emphasized that Pakistan’s economic stability depends on structural reform, broader taxation, and climate-aware development planning.
