Shahid Khaqan Abbasi Criticizes Tax System and Budget; Warns of Economic Consequences

Karachi: Former Prime Minister and leader of the Pakistan Peoples Party, Shahid Khaqan Abbasi, has criticized Pakistan’s tax system, calling it unjust and unsustainable. He stated that the recent budget has proven that the current system cannot continue functioning effectively.
In a press conference with his party colleague and former Finance Minister, Miftah Ismail, Abbasi expressed concerns over the unchanged nature of the budget, likening it to a 30-year-old plan. He highlighted the absence of efforts to control government expenditures, with the government relying on new taxes and borrowing to meet its financial needs.
Abbasi argued that such a budget cannot bring any real change, particularly in the country’s economic conditions. He pointed out that although there is talk of macroeconomic stability, particularly in commodity prices like crude oil, the government’s failure to implement reforms and manage its economy properly would only lead to growing fiscal deficits, which ultimately affect the common man.
He criticized the significant tax increases over the last four years, the high interest rates, and rising utility costs, which have contributed to rising inflation. Abbasi also expressed concern over the growing poverty and unemployment in the country, noting that the government has failed to address these issues while focusing on increasing the salaries of ministers and members of the National Assembly.
The former Prime Minister also raised alarm over the rising government expenses, including taxes on basic commodities like chicken, which he suggested could have been avoided by reducing government spending. He further criticized the government’s handling of the sugar industry, citing the export and import policies that he claimed have drained billions from the pockets of the poor.
Abbasi called for a complete overhaul of the tax system, emphasizing that the current structure is not just, nor is it sustainable. He also warned that the 62% tax rate on companies would stifle economic growth, hinder job creation, and prevent industries from developing.
He concluded by stating that if the Federal Board of Revenue (FBR) system is not reformed, capital will continue to flow out of the country, further damaging the economy. He also emphasized the need for the government to reduce its expenditure and address corruption, particularly in the Public Sector Development Program (PSDP), to ensure that resources are used effectively for the country’s development.