Pakistan’s top foreign investors on Thursday warned that persistent unpredictability and frequent changes in tax policy are critically undermining business confidence and deterring investment, calling for urgent structural reforms to create a stable economic environment.
The concerns were raised during an interactive session, where members of the Overseas Investors Chamber of Commerce and Industry (OICCI), representing 200 leading foreign companies, engaged with Dr. Najeeb Memon, the Director General of the Tax Policy Office (TPO).
Investors highlighted systemic challenges including prolonged delays in tax refund settlements, inconsistent policy implementation, and a high cumulative cost of doing business, identifying them as critical areas requiring government intervention to restore confidence.
The dialogue, which deliberately focused on structural issues over specific cases, acknowledged recent progress on macroeconomic stability but stressed that a reliable and transparent tax framework was now paramount for sustainable foreign direct investment (FDI).
Yousaf Hussain, President of OICCI, articulated that the value of proposed reforms lies in their practical application. ‘Businesses plan over long horizons, and frequent changes, unclear interpretations, and retrospective measures undermine confidence and raise the cost of capital,’ he said.
Hussain advocated for a consultative, medium-term tax policy framework focused on broadening the tax base and simplifying compliance to align with national priorities such as exports and job creation.
Echoing these sentiments, OICCI Secretary General M. Abdul Aleem emphasised the need for reforms to sustain investor trust. ‘Foreign investors are increasingly looking beyond short-term stabilisation towards structural reforms. A predictable tax regime, timely settlement of pending tax refunds, and consistent implementation of policies are essential to improving Pakistan’s competitiveness,’ he noted.
Responding to the chamber”s input, Dr. Najeeb Memon of the Tax Policy Office assured participants that stakeholder perspectives are central to effective policymaking.
‘Engagements such as this with key economic stakeholders in the country help the Government of Pakistan understand investor perspectives at a strategic level,’ Dr. Memon stated, affirming that the OICCI’s input would be carefully considered.
The session concluded with both sides agreeing to maintain regular engagement to ensure investor perspectives continue to facilitate tax policy discussions, with the shared objective of improving predictability and consistency in Pakistan’s tax framework.