Finance Minister Senator Muhammad Aurangzeb has said Pakistan needs to bring more citizens into the formal tax system to support economic growth and strengthen the country’s public finances. He made the remarks while addressing the Pakistan Investment Roundtable hosted by the Pakistan High Commission in London, which brought together investors and representatives of global financial management firms.
Aurangzeb said fiscal consolidation measures were producing improvements in Pakistan’s financial position, pointing to a primary surplus, a lower fiscal deficit and stronger revenue collection. He also highlighted progress on institutional and fiscal reforms, saying these measures were part of broader efforts to improve macroeconomic stability and strengthen the foundation of the economy.
The finance minister said expanding the tax base and improving tax enforcement remained important for sustainable economic growth. He maintained that Pakistan needs a larger number of taxpayers contributing to the formal economy rather than relying on a relatively narrow tax base. According to him, reforms have also removed discretionary powers from tax authorities and established a system without preferential treatment in taxation.
Aurangzeb further said that no additional taxes had been imposed on the salaried class. His comments came in the context of the government’s wider efforts to improve revenue collection and strengthen tax administration. Expanding the number of taxpayers and improving compliance are among the measures being pursued as Pakistan works to increase domestic revenue generation.
The finance minister also discussed reforms involving state-owned enterprises and the government’s privatisation programme. He said reforms in the energy sector, greater financial transparency and improvements in the ease of doing business would provide additional support for the government’s objective of achieving macroeconomic stability.
Addressing international investors in London, Aurangzeb said Pakistan’s economy had experienced setbacks from major nationwide flooding during the previous year as well as the recent conflict in the Middle East, which contributed to higher global oil prices. Higher energy costs can place pressure on Pakistan’s external account, inflation and fiscal position because of the country’s reliance on imported energy.
Despite these challenges, the finance minister said Pakistan remained open for business and was experiencing renewed interest from international investors. He also highlighted Pakistan’s progress under its engagement with the International Monetary Fund, stating that the country had completed all IMF reviews on schedule. According to Aurangzeb, this progress had been followed by three credit rating upgrades.
The Pakistan Investment Roundtable provided an opportunity for government officials and representatives of financial institutions to discuss the country’s economic position and investment environment. During an interactive question-and-answer session, Aurangzeb discussed economic developments, investment opportunities across different sectors, partnerships with international organisations and measures intended to improve the business environment.
The discussions also covered Pakistan’s efforts to strengthen its economic institutions and improve conditions for investment. Reforms involving taxation, state-owned enterprises, energy, financial transparency and the wider business environment remain part of the government’s economic programme as it seeks to maintain fiscal discipline and attract investment.
State Bank of Pakistan Governor Jamil Ahmed also attended the event, along with Advisor to the Finance Minister Khurram Schehzad and Pakistan’s High Commissioner to the United Kingdom Tipu Usman. Their participation brought together officials involved in monetary policy, economic planning, investment engagement and Pakistan’s international representation.
Aurangzeb’s remarks placed expansion of the tax base at the centre of Pakistan’s efforts to strengthen domestic finances. The government is seeking to improve revenue collection while pursuing institutional reforms, privatisation and measures aimed at supporting investment. The effectiveness of these efforts will depend on implementation of the reforms and the ability to broaden participation in the formal tax system while maintaining economic activity and investor confidence.
Follow the PakBanker Whatsapp Channel for updates across Pakistan’s banking ecosystem.