ISLAMABAD: As debate over a proposed 28th amendment to the Constitution gathers momentum, a major Pakistani business group on Friday warned that the country’s chronic policy instability, high taxes and currency volatility cannot be addressed without anchoring economic reforms directly in the Constitution to restore investor confidence.

The Pakistan Business Forum’s demand that Parliament embed economic reform into the country’s constitutional structure comes as the government considers a 28th Constitutional Amendment that would address long-running tensions between federal and provincial fiscal powers. Central to the debate is Article 160(3A), which says the provinces’ share in the National Finance Commission (NFC) Award “shall not be less than” the previous award.

The government argues the rigid formula has restricted federal fiscal space, while critics warn that altering Article 160(3A) could upend provincial rights guaranteed since the 18th Amendment which devolved power to the provinces. The NFC Award determines how Pakistan divides billions in annual revenue between the center and provinces, making it one of the most consequential fiscal mechanisms in the country.

Against this backdrop, PBF said Pakistan’s economic issues “should be addressed by Parliament through comprehensive legislation, and that the proposed 28th Constitutional Amendment could play an imperative role in restoring investor confidence.”

Forum President Khawaja Mehboob ur Rehman proposed that the amendment should anchor core economic reforms, including:

“Strengthening the national currency, Rationalizing tax rates; Establishing predictable business-friendly policies,” the statement said.

“Such constitutional clarity … would signal a clear and stable economic direction, something Pakistan has lacked due to frequent shifts in policy.”

Rehman warned that Pakistan’s current tax structure was crippling investment, saying “investment is impossible under the present 40 percent tax regime.” He also questioned the relevance of the Board of Investment “if the government remains unwilling to revise the tax structure,” urging the state to adopt “significant reductions in existing tariffs and tax rates” to revive economic activity.

The business group also linked decades of currency devaluation to structural failures.

PBF noted that “despite repeated rounds of currency devaluation over the past five decades, neither export competitiveness nor sustainable economic growth has materialized.”

The forum pointed out that the rupee had fallen “from Rs. 9.99 per dollar to nearly Rs. 284 per dollar by 2025, yet economic fundamentals remain weak.”

Pakistan’s demographic and investment challenges add to the urgency, PBF said, highlighting the country’s population of 256 million, which is projected to reach 266 million by 2027, alongside an investment-to-GDP ratio stuck at 13.8 percent.

Public investment, vital for private-sector confidence, is limited to just 2.9 percent of GDP, the forum added.

The group stressed that Pakistan cannot continue shifting economic frameworks every few years, saying “we must admit Pakistan has experimented with a new economic model after every five years.”

PBF said structural leakages must be plugged before any future budgets are framed, warning that “meaningful fiscal planning is impossible without addressing structural inefficiencies.”

Rehman said constitutional clarity and long-term planning, rather than short-term fixes, were now essential to rebuild investor trust.

“Stability, predictability, and coherent long-term planning are essential for rebuilding business confidence and ensuring economic recovery,” he added.