ISLAMABAD: Federal Finance Minister Muhammad Aurangzeb has pledged to restore public trust and credibility in the Federal Board of Revenue (FBR), saying taxpayer confidence, predictable policies and stronger enforcement are essential to building a modern, growth-friendly tax system.
Aurangzeb made the remarks on Tuesday while addressing a two-day high-level workshop titled “Reforms for a Modern and Growth-Friendly Tax System in Pakistan.” The Ministry of Finance convened the event in collaboration with the International Monetary Fund (IMF).
The minister said ongoing reforms had raised the FBR’s tax-to-GDP ratio from 8.8% to 10.3%. He also reported a 40% increase in tax revenues over the past two fiscal years, attributing the growth to stronger enforcement and new policy measures.
Aurangzeb explained that enforcement measures contributed 0.9 percentage points of the 1.5-percentage-point increase in the tax-to-GDP ratio. New policy initiatives accounted for the remaining 0.6 percentage points.
“We stopped leakage, theft and corruption,” he said, adding that stronger enforcement would play an increasingly important role in the next phase of tax reforms.
He said the government would continue to strengthen the tax system, broaden the tax base and improve revenue collection to support economic stability and sustainable growth.
Aurangzeb Calls for Policy Continuity
The finance minister stressed that businesses needed a predictable environment to make long-term investment decisions.
“We cannot continue to give surprises to private-sector investment at every single budget,” he said, calling for greater consistency in government policies to encourage investment.
Aurangzeb also identified political consensus, stronger institutions and taxpayer confidence as key requirements for sustainable tax reform. He emphasised cooperation between federal and provincial governments to build broader agreement on tax policies.
Restoring trust and credibility in the tax authority remained a major priority, he said, highlighting the need to improve relations between taxpayers and the tax administration.
Workshop Focuses on Modernising Tax System
The workshop brought together senior government officials, representatives of the IMF and World Bank, international tax experts, academics and private-sector leaders.
Participants are discussing ways to modernise Pakistan’s tax system and strengthen its contribution to sustainable economic growth.
The programme includes six substantive sessions covering:
- Taxation and economic growth
- Modernisation of Pakistan’s tax system
- A unified sales tax regime across the federation and provinces
- A simpler and more neutral income tax system
- Tax administration, digitalisation and taxpayer trust
- Fiscal federalism and provincial tax revenues
Aurangzeb delivered the opening remarks alongside Jihad Azour, director of the IMF’s Middle East and Central Asia Department, and Rodrigo Valdés, director of the IMF’s Fiscal Affairs Department.
