KARACHI: Pakistan’s finance chief said on Friday the country’s tax-to-GDP ratio was expected to reach 10.6% by the end of the current fiscal year, according to an official statement, as the government works to build on economic progress made under recent International Monetary Fund (IMF) loan programs.
Pakistan’s tax-to-GDP ratio, one of the lowest in the region, stood at around 8.8% in fiscal year 2023-24. Finance Minister Muhammad Aurangzeb has repeatedly warned that such low levels of revenue mobilization are unsustainable and pose long-term risks to fiscal stability.
Aurangzeb shared the projection while briefing representatives of Standard & Poor’s Global Ratings as part of Pakistan’s ongoing sovereign ratings review.
“The Finance Minister presented a detailed overview of the government’s macroeconomic reform agenda and reaffirmed Pakistan’s commitment to achieving sustainable and inclusive economic growth by enhancing productivity and promoting exports,” the finance ministry said in a statement after the meeting.
He said Pakistan’s external portfolio was well-managed, with foreign exchange reserves projected to reach $14 billion by the end of June.
“He further stated that the tax-to-GDP ratio was expected to reach 10.6 percent by the end of June, which would mark progress toward the government’s target of raising it to 13 percent by the conclusion of the 37-month Extended Fund Facility (EFF) with the International Monetary Fund (IMF),” the statement said.
Pakistan has taken several steps to improve revenue collection, including the automation of processes at the Federal Board of Revenue (FBR), the operationalization of the National Tax Council and the imposition of agricultural income tax.
It has also separated the Tax Policy Office from the FBR to better align tax policymaking with broader economic goals.
Aurangzeb also highlighted recent surpluses in both the primary balance and the current account, along with falling inflation and current account deficit figures, which he said were contributing to improved economic fundamentals.
During last month’s IMF-World Bank Spring Meetings in Washington, the Pakistani finance chief held over 70 engagements with rating agencies, development finance institutions, investors and think tanks.
The government also maintains the international community broadly supports Pakistan’s reform agenda, as it tries to maintain its overall economic momentum.
Pakistan sees tax-to-GDP ratio hitting 10.6% by June as reform efforts continue
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Pakistan sees tax-to-GDP ratio hitting 10.6% by June as reform efforts continue
- The country’s tax-to-GDP ratio was among the lowest in the region and stood at 8.8% in FY2023-24
- Pakistan’s finance chief projects foreign exchange reserves to reach $14 billion by the end of June
Pakistan finance chief says country leveraging AI to boost tax compliance, revenu
- Aurangzeb says AI-driven systems are cutting leakages, discretionary intervention in tax administration
- He tells a national workshop the government must focus on applied AI, not technology for its own sake
KARACHI: Pakistan is deploying artificial intelligence-driven systems to strengthen tax compliance and enforcement as part of a broader reform push, Finance Minister Muhammad Aurangzeb said on Tuesday, adding the country must focus on applied AI solutions.
He was speaking during a panel discussion at the National Artificial Intelligence Workshop in the capital, as Pakistan undertakes sweeping fiscal and structural reforms under a $7 billion International Monetary Fund loan program aimed at stabilizing the economy and boosting revenue collection.
The government has pledged to widen the tax base, curb leakages and digitize administration, with technology playing a central role in its tax transformation agenda.
“AI-enabled systems are playing an increasingly important role in strengthening compliance, enforcement, and decision-making,” Aurangzeb said, according to a statement released by the finance division.
“The Government’s ongoing tax transformation, anchored in reforms to people, processes, and technology, is leveraging AI-led CRM [Customer Relationship Management] systems, AI-led production monitoring, risk-based compliance tools, and faceless customer processes to enhance transparency, reduce leakages, and improve revenue outcomes,” he added.
The finance minister said the focus for a country like Pakistan must remain on applied AI solutions that deliver measurable gains in efficiency, transparency and productivity, rather than on adopting technology for its own sake.
Reducing discretionary human intervention through technology was central to curbing inefficiencies and corruption, he said, adding that AI-led systems had generated tangible fiscal gains that would not have been achievable through manual processes alone.
Aurangzeb said investing in human capital and skills development was essential to enable Pakistan’s youth to participate in higher-value segments of the global technology ecosystem, noting that technologies such as blockchain and data analytics could support productivity-led growth.
He maintained artificial intelligence offered opportunities in revenue mobilization, public service delivery and climate and population management, adding that realizing those gains would require clear policy direction, institutional readiness and a coordinated, whole-of-government approach.
