On June 10, 2025, the federal government unveiled the much-anticipated annual budget, only to be met with widespread rejection from the country’s business community. Business chambers across Pakistan have strongly criticized the budget, calling it regressive, unjust, and riddled with hidden taxes. Their concerns highlight a growing disconnect between policymakers and the realities faced by taxpayers and common citizens alike.

At the heart of the criticism lies the Federal Board of Revenue’s (FBR) approach to taxation. Instead of expanding the tax net and bringing non-filers into the system, the government appears to have doubled down on squeezing those who are already compliant. This has led to frustration among registered taxpayers, especially businesses that already contribute significantly to the national exchequer. While these contributors are burdened further, those operating outside the FBR’s reach continue to evade their responsibilities, escaping without consequence.

A major demand from business leaders is the implementation of the Point of Sale (POS) system across all commercial outlets, regardless of size. This would ensure proper documentation and help widen the tax base — a necessary step toward a fair and sustainable economic model. However, the government has once again failed to enforce this system comprehensively, allowing the informal economy to thrive unchecked.

In another blow to fairness, the budget has reportedly increased taxes on small cars — a move that will hurt the middle class disproportionately. At a time when inflation is already eating into household incomes, the decision to further tax affordable transportation adds insult to injury. The salaried class received marginal relief, but the average citizen — the common man — was left out entirely. Prices of essential items continue to rise, and no tangible steps have been announced to control inflation or stabilize the economy.

Equally troubling is the glaring inequity in tax exemptions. Certain enterprises and conglomerates, particularly those linked to powerful forces, have allegedly been granted exemptions — a pattern that reeks of favoritism. This not only undermines the principle of tax justice but also deepens public distrust in the system.

Moreover, macroeconomic indicators offer little cause for optimism. The Pakistani rupee continues to slide, with the dollar exchange rate at an all-time high, putting additional pressure on imports and domestic prices. Despite government rhetoric, exports remain stagnant, reflecting deeper structural issues that the budget fails to address.

In sum, this budget is seen not as a roadmap to economic recovery, but as a missed opportunity. It ignores the urgent need to broaden the tax base, fails to address inflation, and offers no meaningful relief to the masses. If the government truly wants to stabilize the economy and foster public confidence, it must engage with stakeholders, embrace transparency, and introduce bold structural reforms — not burden the honest while shielding the privileged.

Without these corrective steps, the gap between the governed and the government will only widen — and the cost of such disconnection will be paid not just in rupees, but in public trust.

Trump’s China flip-flop raises questions

In yet another dramatic turn of events, U.S. President Donald Trump announced that a trade deal with China has been finalized and will soon be signed. He also stated that he is planning to meet with Chinese President Xi Jinping in the near future, adding that China is “a good country” and “a great friend.” These remarks mark a significant shift from Trump’s earlier rhetoric, which often painted China as an economic adversary and strategic threat. This sudden pivot raises important questions about the consistency and reliability of the President’s foreign policy stance.

When Donald Trump assumed office, he was unflinching in his criticism of China. He accused Beijing of manipulating its currency, stealing American jobs, and engaging in unfair trade practices. His administration imposed sweeping tariffs, igniting a trade war that sent ripples through global markets and strained diplomatic ties. China was labeled a usurper, and relations between the two powers reached a low point not seen in decades.

Today, however, the tone is strikingly different. The very nation once blamed for America’s economic woes is now being praised as a valuable ally. Trump’s endorsement of China as a “good country” not only contradicts his earlier positions but also exposes the unpredictable nature of his diplomacy. While a thaw in U.S.-China relations is certainly welcome in an increasingly tense global environment, such abrupt reversals do little to inspire confidence—either domestically or internationally.

This inconsistency in messaging places American foreign policy in a difficult position. The U.S. State Department and other diplomatic institutions are often left scrambling to keep pace with the President’s shifting statements. Allies and adversaries alike find it hard to discern the true direction of U.S. policy, which can undermine trust and complicate negotiations. For China, the sudden friendliness may be viewed with suspicion—after all, if Trump could turn so quickly from foe to friend, what assurance is there that he won’t reverse course again?

Moreover, the upcoming trade pact, while a potential win for economic diplomacy, must be scrutinized for its long-term implications. Will it address the core issues that sparked the trade war, such as intellectual property theft and market access? Or will it simply serve as a temporary truce, masking unresolved tensions beneath a veneer of progress? Trump’s declaration may signal a political victory, but the real test lies in the durability and substance of the agreement.

Time will tell whether this new chapter in U.S.-China relations is a genuine shift or merely another episode in a presidency marked by unpredictability. What is clear, however, is that consistency and strategic coherence are vital in managing one of the most important bilateral relationships in the world. If President Trump truly wishes to foster lasting cooperation with China, he must move beyond impulsive declarations and adopt a stable, principled approach—something that has so far eluded his administration.