Pakistan is currently facing a critical economic situation, grappling with challenges that threaten its stability and future growth. Despite promises made by the government to revitalize the economy and attract foreign investment, these efforts have not yielded the expected results. International investors have shown little enthusiasm, and many of the anticipated reforms have yet to materialize. At the heart of the crisis is the decline in foreign investment, high corporate taxes, policy inconsistencies, and the underlying structural weaknesses in the economy.

The country’s foreign direct investment (FDI) has taken a sharp downturn. The State Bank of Pakistan reported an 82 percent drop in just the first four months of the fiscal year, from USD 1.015 billion to just USD 748 million. This drastic decline highlights the erosion of investor confidence, which poses a significant risk to Pakistan’s long-term economic prospects. When compared to regional competitors like India, which attracted USD 80 billion in FDI over the same period, the urgency for Pakistan to rethink its economic policies becomes even more apparent.

One of the primary obstacles to attracting investment is the high corporate tax burden. Pakistan’s tax system is increasingly viewed as a deterrent to both local and foreign businesses looking to expand. There’s a growing call for tax reforms that would ease the financial strain on businesses and create a more investor-friendly environment. However, the country’s economic landscape remains unappealing due to bureaucratic inefficiencies, inconsistent policies, and a lack of a stable regulatory framework. These issues have led to policy paralysis, making it difficult for investors to commit to long-term........

© Business Recorder