THE International Monetary Fund’s (IMF) recent assessment of Pakistan’s economic performance offers a glimmer of hope in an otherwise tumultuous financial landscape. The delegation’s satisfaction with Pakistan’s progress in utilizing international loans signals a degree of fiscal improvement and operational discipline. However, the global lender has not withheld its customary calls for further reform. Among its key recommendations are the introduction of new taxes and tighter alignment between fiscal policies to ensure a sustainable economic trajectory.
While these prescriptions align with global financial best practices, their implementation requires careful consideration. Pakistan’s economic fabric is delicate, weighed down by historical inefficiencies, persistent inflation and a tax culture that disproportionately burdens its salaried class. Expanding the tax net to generate additional revenue is a logical step, but its execution must reflect fairness and foresight. The country cannot afford a reform agenda that exacerbates existing inequalities or alienates its tax-compliant citizens.
The salaried class, often the backbone of direct tax collection, already carries an outsized share of the financial burden. Additional levies on this segment, without addressing systemic inefficiencies or expanding the tax base, would only deepen discontent. Policymakers must recognize that economic reform is not merely a numbers game but an exercise in balancing fiscal responsibility with social equity.
For these reforms to succeed, an inclusive and consultative approach is essential. Policymakers should engage with stakeholders across sectors, including representatives from the private sector, civil society and labour unions. Such dialogue can uncover innovative solutions that go beyond conventional tax hikes, such as broadening the base to include sectors that remain under-taxed or completely outside the tax net. Addressing tax evasion, reducing administrative inefficiencies and modernizing the taxation system could yield sustainable revenue streams without disproportionately impacting any one segment of the population.
Furthermore, transparency in how tax revenue is utilized will be crucial in gaining public trust. When citizens see tangible improvement in public services, infrastructure and economic stability as a result of their contributions, they are more likely to support and comply with tax measures. Without this trust, even the most technically sound reforms risk rejection and resistance.
As Pakistan navigates this critical juncture, the government must strike a delicate balance. Meeting the IMF’s conditions is undoubtedly important for securing financial stability and access to international funding. Yet, these measures must be tempered with compassion and pragmatism to avoid overburdening already struggling segments of society. The success of any reform lies in its ability to uplift the nation as a whole rather than deepen existing divides.
—The writer is contributing columnist, based in Turbat, Balochistan.
