The FY25 budget presents challenges for everyone, with few economic actors benefiting. Despite compromises due to pressures from political constituencies and powerful circles, the government had to impose new taxes and higher rates on existing ones, given the high deficit, crippling debt levels, and IMF conditionalities for a new programme.

As a result, the government appears to have succeeded in displeasing most stakeholders, with virtually no constituency. Even with the effort to protect real estate players and retailers, these sectors are worse off in FY25. The urban middle class feels further squeezed by the increased tax burden, exacerbating the disparity between those within and outside the tax net.

The situation is becoming increasingly difficult for the ruling party. Since the inception of PML (N), urban retailers, wholesalers, shopkeepers, and some professionals, particularly in Punjab, have been key its supporters. Now, these traditional voters are showing signs of discontent. It’s a lose-lose situation for the government.

These new taxes follow two years of skyrocketing inflation and........

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