Tycoons, aware of challenges and Prime Minister Shehbaz’s government’s weakness, are not hopeful. The volatile market is desperate for positive signals. The people, however, expected relief in an election-year budget.

To avoid higher levies on their income/profit, bankers, brokers and barons are lobbying hard, approaching heavyweights in the power corridors. The currency dealers, commodity traders and commercial importers are labouring to universalise their interests for policy support.

Exporters site forex squeeze in the country to justify the demand for preferential treatment. Agriculturists tie food security in Pakistan with their fortunes for concessions. The ruling coalition and allied parties have taken a dent in political capital by pursuing stabilisation policies and will do all it takes in the budget to win constituents back.

The representatives of different segments of people and businesses told sad tales of mounting difficulties in sustaining families and enterprises in a shrinking economy.

Less than 3pc of taxpayers pay 90pc of taxes whereas the ratio in India is 22pc paying 90pc of total taxes

The government finance team insisted that the country under their watch managed to stay afloat amidst widespread fears of drowning under the weight of debt.

A higher-up, active in the economic circles, said the actual reality of Pakistan is better than what the data suggests. He said the budget would target reviving growth and pull up working families from the economic pit. He suspected the International Monetary Fund programme would end prematurely.

Several leaders of the Pakistan Muslim League (Nawaz) were approached for comments, but their comments didn’t reach within the deadline. The prime minister is reported to have directed the budget-making team to craft a business and people-friendly budget.

A leader who wished for anonymity believed the government would opt for an easy option by penalising those who succeeded in the tough business environment. “The elite must brace to pay more for the follies the government. The one-time advance tax clapped last year will be extended, the rate of super tax will increase, banks and professionals will be squeezed further to make up for tax evaders in retail, real estate and agriculture sectors,” he said.

Saquib Shirazi, President and CEO Atlas Honda and Chairman Pakistan Auto Manufacturers Association, who occupies a seat on boards of several leading companies, skipped what he expected and focused in detail on his ideas for a pragmatic approach in his written response from somewhere in the Far East.

He made a case for expanding the tax net and making it equitable by revising up the rates for under-taxed sectors (real estate, retail and transport), reducing the tax burden on manufacturing, trained professionals and low-income families. He was in favour of direct subsidies to the tillers for food security and a steady supply of agriculture raw materials. He advocated upward revision of the minimum wage and continuation of income support to the poorest.

Ehsan Malik, CEO Pakistan Business Council, sounded dejected. He worded his argument differently but repeated mostly what Mr Shirazi said. He blamed the political class for the country’s failings.

He said in a written response: “Hope and expectation will diverge wider than normal this year. A constant will be reliance on taxing the already taxed. In an election year, the vote banks of traders, retailers and real estate will remain untouched.

“Databases of non-taxpayers will remain unmined. An example of an easier course to follow is to levy taxes on the taxed reserves of the corporate sector, notwithstanding its acute need to fund expensive working capital. Super tax, a tax introduced on a “one-time” basis last year, will continue to punish those who dare to grow.

“The economy will informalise at a faster rate as smugglers fill the void left by import crunched formal sector. The attraction of remaining under the radar will grow.

“The salaried may get some relief in the election year. Overall, we are caught in a vicious cycle. Low resource mobilisation will prevent investment in socio-economic development that has kept Pakistan back in South Asia.

“The Federal Board of Revenue, though, is not the real culprit. Our political leaders lack the will to broaden the tax base. Less than three per cent of taxpayers pay 90pc of taxes. The ratio in India is 22pc paying 90pc of total taxes.”

M Abdul Aleem, Secretary General Overseas Chamber of Commerce and Industry, expected “a realistic fact-based budget” on June 9. He said that the government has been nudged by the corporate sector “to bring the huge untaxed economy on record and collect taxes”. He called for a fair equitable fiscal regime to boost economic activity.

The Punjab-based business leaders have not surrendered to despair. Khurram Mukhtar, a leading textile mill owner of Faisalabad and patron in chief of the Pakistan Textile Exporters Association, expected the next budget to be people and business-friendly. Textiles deserve the government’s attention and support, he argued.

He pleaded for attention to small and medium units and called for the abolition of the ‘non-filers’ category as it hurts business growth. He detested energy disparity among provinces and hoped the government to address the issue. He called for the revival of SRO 1125, that exempted/excluded exportable textile production from taxes.

“We urge the government to prioritise transparency, accountability, and good governance in all aspects of its operations. This will help build trust and confidence among citizens and investors, necessary for growth and development.”

Published in Dawn, The Business and Finance Weekly, May 29th, 2023