ISLAMABAD: Federal Finance and Revenue Minister Senator Muhammad Aurangzeb has pledged to rebuild public confidence in the Federal Board of Revenue (FBR), emphasising that taxpayer trust, consistent policies and effective enforcement are crucial to establishing a modern tax system that supports economic growth.
Addressing a two-day high-level workshop titled “Reforms for a Modern and Growth-Friendly Tax System in Pakistan” in Islamabad, Aurangzeb said recent reforms had increased the country’s tax-to-GDP ratio from 8.8 per cent to 10.3 per cent. The workshop was organised by the Ministry of Finance in collaboration with the International Monetary Fund (IMF).
The finance minister also reported a 40 per cent increase in tax revenue over the past two fiscal years, crediting stronger enforcement measures and policy initiatives for the improvement.
He explained that enforcement contributed 0.9 percentage points to the 1.5-percentage-point increase in the tax-to-GDP ratio, while policy changes accounted for the remaining 0.6 percentage points.
Aurangzeb said the government had taken steps to curb revenue leakages, tax evasion and corruption, adding that stronger enforcement would remain a central component of the next phase of tax reforms.
He noted that efforts were underway to expand the tax base, improve revenue collection and strengthen the tax system to support macroeconomic stability and sustainable development.
Highlighting the importance of policy consistency, the minister said businesses needed a predictable economic environment to make long-term investment decisions. He cautioned that frequent changes in government policies, particularly during annual budget cycles, could undermine private-sector investment.
Aurangzeb identified political consensus, institutional strengthening and greater taxpayer confidence as essential elements of lasting tax reform. He also stressed the need for closer coordination between federal and provincial governments to develop broader agreement on taxation policies.
Restoring trust and credibility in the tax authority, he said, was a major government priority, requiring improved relations between taxpayers and tax administrators.
The workshop brought together senior government officials, representatives of the IMF and World Bank, international taxation specialists, academics and private-sector representatives to examine ways to modernise Pakistan’s tax system and improve its contribution to long-term economic growth.
The programme includes six sessions focusing on taxation and economic growth, tax system modernisation, a unified sales tax framework between the federation and provinces, a simpler and more neutral income tax system, tax administration and digitalisation, taxpayer confidence, and fiscal federalism alongside provincial revenue generation.
Aurangzeb delivered the opening remarks with Jihad Azour, Director of the IMF’s Middle East and Central Asia Department, and Rodrigo Valdés, Director of the IMF’s Fiscal Affairs Department.
