Federal Finance and Revenue Minister Senator Muhammad Aurangzeb said Pakistan has set an 11 percent tax-to-GDP target and plans to bring real estate, agriculture, and the retail sector into the tax net as part of a broader reform agenda.
According to the Finance Ministry, in an interview with CNN Business Arabia, the minister highlighted that over the past 18 months, Pakistan has implemented a comprehensive economic stabilization program with measurable positive results. Inflation, which had peaked at 38 percent, has now fallen to single digits, while the country has achieved a primary fiscal surplus and maintained the current account deficit within targeted limits.
Aurangzeb noted that the exchange rate has stabilized, and foreign exchange reserves have improved to cover approximately two and a half months of imports, reflecting external economic strength. He also cited recent global recognition of Pakistan’s improving economic situation, including credit rating upgrades by all three major international rating agencies and approval of the second review under the IMF Extended Fund Facility (EFF).
The finance minister emphasized that economic stability has been achieved through disciplined fiscal and monetary policies, alongside structural reforms. Key reforms are ongoing in taxation, energy, public sector enterprises, public financial management, and privatization to strengthen stability and lay the foundation for sustainable economic growth.
He stated that Pakistan’s tax-to-GDP ratio has increased from 8.8 percent at the start of the reform program to 10.3 percent last fiscal year, with a clear roadmap to reach 11 percent. The government aims to create a tax system that ensures medium- and long-term fiscal self-reliance, expanding coverage to under-taxed but economically significant sectors like real estate, agriculture, wholesale, and retail. Tax evasion and leakages will be reduced through production monitoring and AI-based technology, with reforms also planned for personnel, processes, and technology in tax administration.
On the energy sector, Aurangzeb said measures are underway to improve governance in distribution companies, involve the private sector, advance privatization, and reduce circular debt, addressing long-standing challenges. He stressed that tariff reforms are necessary to make energy competitive for industry and promote industrial activity.
The minister also acknowledged longstanding support from GCC countries—including Saudi Arabia, UAE, and Qatar—through financial aid, investment, and cooperation in IMF programs. Pakistan is now focusing on deepening trade and investment partnerships with these countries. Remittances remain a backbone of the current account, rising from approximately $38 billion last year to an expected $41–42 billion this year, with more than half originating from GCC countries.
Aurangzeb said Pakistan is actively engaging GCC partners for investments in priority sectors such as energy, oil and gas, minerals and mining, artificial intelligence, digital infrastructure, pharmaceuticals, and agriculture. He expressed optimism over finalizing free trade agreements (FTAs) with GCC nations.
The minister reaffirmed that Pakistan’s future economic growth will rely on trade and investment rather than aid, with foreign direct investment in productive sectors expected to boost GDP, create jobs, and generate shared economic benefits for Pakistan and partner countries. He concluded that the government is fully mobilized to realize this vision.
