Federal Finance Minister Muhammad Aurangzeb has announced plans to increase Pakistan’s tax-to-GDP ratio from the current 9-10% to 13% over the next three years. This goal, outlined as part of the government’s economic strategy, underscores the importance of comprehensive tax reforms in achieving economic stability. Speaking alongside Minister of State Ali Pervez and Federal Minister for Information and Broadcasting Attaullah Tarar, Aurangzeb emphasized that aligning the income and expenditure of taxpayers is key to sustainable growth.
The government has already introduced a tax amendment bill aimed at reducing human intervention within the Federal Board of Revenue (FBR), which will rely more on technology to minimize corruption and harassment. Aurangzeb noted that this digital push, which began in March, is a crucial part of the effort to improve tax compliance and efficiency. The reforms are expected to boost revenue collection, with a target of exceeding a 13.5% tax-to-GDP ratio within the next three years.
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Minister of State for Finance, Ali Pervez Malik, also addressed the issue of inflation, describing it as the largest tax burden on ordinary citizens. He shared that inflation has decreased significantly, from 30-40% to around 5%, bringing relief to the public. Malik also highlighted the government’s focus on fair tax distribution across various sectors, ensuring that no single group carries an undue burden. To this end, the government is reviewing sectors like sugar, beverages, and cement to address tax gaps and promote equitable contribution to the economy.
The government is also working on expanding the tax net, with plans to include 190,000 individuals identified as potential taxpayers. These efforts are part of a broader push to ensure wealthier individuals pay their fair share, with ongoing capacity-building within the FBR to improve tax compliance and data collection. The reforms aim to make Pakistan’s tax system more efficient and fair, benefiting both businesses and ordinary citizens.
