ISLAMABAD: Prime Minister Shehbaz Sharif on Friday launched a performance management system for Pakistan’s tax authority, urging officials to enhance efficiency and boost revenue collection to help reduce the country’s reliance on external debt, state media reported.
The move is part of broader reforms tied to Pakistan’s $7 billion loan program with the International Monetary Fund (IMF), which include overhauling the Federal Board of Revenue (FBR) through greater digitization, institutional accountability and tax base expansion.
The FBR, long criticized for inefficiency and underperformance, plays a central role in Pakistan’s fiscal framework and is under pressure to deliver sustained growth in tax revenues.
“If we want to move away from the International Monetary Fund (IMF), we must work hard to increase our revenues,” Sharif said at the launch event, according to the state-run Associated Press of Pakistan (APP).
He also described it as a long journey, adding more work was required to plug the loopholes in the system.
The newly launched performance system introduces evaluations of FBR officers based on defined metrics. Sharif said similar models would be introduced across other state institutions to promote a culture of accountability.
During the visit, officials also briefed the prime minister on separate reforms underway at the FBR, including the development of a data-driven decision-making framework. That system will pull information from entities like the National Database Registration Authority (NADRA) and banking institutions to track payments and asset acquisitions, as part of efforts to align the tax regime with international standards.
Authorities said over 35 additional companies had been added to the tax net as part of ongoing digitization efforts. Tax return forms have also been simplified, and preparations are underway for the nationwide rollout of a digital invoicing system.
Sharif acknowledged a 27 percent growth in FBR revenue over the past year but said more progress was needed to steer Pakistan out of its debt crisis and ensure fiscal stability.
Pakistan’s tax-to-GDP ratio remains among the lowest in the region, limiting the government’s ability to fund public services and increasing dependence on borrowing.
Strengthening the FBR is seen as critical to reducing the budget deficit and restoring investor confidence.
The prime minister also visited FBR’s newly established delivery unit, praising the officers as a “national asset” and expressing hope that the ongoing reforms would lead to a more transparent and effective tax administration.
Pakistan PM launches tax authority’s performance system amid IMF reform push
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Pakistan PM launches tax authority’s performance system amid IMF reform push
- The international lender wants digitization of FBR along with tax base expansion in Pakistan
- The PM was briefed about FBR’s data-driven decision-making to ensure greater efficiency
Pakistan issues over $7 billion sukuk in 2025, nears 20 percent Shariah-compliant debt target
- Finance Adviser Khurram Schehzad says this was the highest-ever Sukuk issuance in a single calendar year since 2008
- Pakistan’s Federal Shariat Court ordered in 2022 the entire banking system to transition to Islamic principles by 2027
ISLAMABAD: Pakistan’s Finance Adviser Khurram Schehzad on Monday said the country achieved a landmark breakthrough in Islamic finance by issuing over Rs2 trillion ($7 billion) sukuk this year, bringing it closer to its 20 percent Shariah-compliant debt target by Fiscal Year 2027-28.
A sukuk is an Islamic financial certificate, similar to a bond, but it complies with Shariah law, which forbids interest. Pakistan’s Federal Shariat Court (FSC) had directed the government in April 2022 to eliminate interest and align the country’s entire banking system with Islamic principles by 2027.
Following the ruling, the government and the State Bank of Pakistan (SBP) have undertaken a series of measures, including legal reforms and the issuance of sukuk to replace interest-based treasury bills and investment bonds.
“In 2025, the Ministry of Finance (MoF) through its Debt Management Office, together with its Joint Financial Advisers (JFAs), successfully issued over PKR 2 trillion in Sukuk,” Schehzad said on X, describing it as “the highest-ever Sukuk issuance in a single calendar year since 2008 by Pakistan.”
Pakistan made a total of 61 issuances across one-, three-, five- and 10-year tenors, according to the finance adviser. The country also successfully launched its first Green Sukuk, a Shariah-compliant bond designed to fund environment-friendly projects.
He said the Green Sukuk was 5.4 times oversubscribed, indicating investor demand was more than five times higher than the amount the government planned to raise, which showed strong market confidence.
“The rising share of Islamic instruments in the government’s domestic securities portfolio (domestic debt) underscores strong momentum, growing from 12.6 percent in June 2025 to around 14.5 percent by December 2025, clearly positioning the MoF to achieve its 20 percent Shariah-compliant debt target by FY28,” Schehzad said.
“This milestone also reflects the structural deepening of Pakistan’s Islamic capital market, sustained investor confidence, and the strengthening of sovereign debt management.”
He said Pakistan was strengthening its government securities market by making it more resilient, diversified, and future-ready, supported by a stabilizing macroeconomic environment, a disciplined debt strategy, and a clear roadmap for Islamic finance.
