Pakistan plans to raise tax-to-GDP ratio to 11 percent this year amid economic reform push

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Updated 17 October 2025
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Pakistan plans to raise tax-to-GDP ratio to 11 percent this year amid economic reform push

  • Pakistan has one of the lowest tax-to-GDP ratios in the region, despite a population of over 240 million
  • In June, the government had set a record-high tax collection target of $47.4 billion for the year 2025–26

KARACHI: Pakistan intends to increase its tax-to-gross domestic product ratio from the existing 10.2 percent to 11 percent this year, Finance Minister Muhammad Aurangzeb said on Thursday, as Islamabad pushes for economic reforms.

Pakistan has lately introduced several reforms to ensure economic stability and to meet structural benchmarks under a $7 billion International Monetary Fund (IMF) program Islamabad secured last year.

The South Asian country has one of the lowest tax-to-GDP ratios in the region, despite a population of more than 240 million, and has often failed to meet its tax collection targets.

Speaking at the Atlantic Council in Washington, Aurangzeb outlined initiatives to bring agriculture, retail and real-estate sectors into the tax net, improve compliance through technology and AI-driven analytics.

“He reaffirmed the government’s commitment to raise the tax-to-GDP ratio from 10.2 percent to 11 percent this year, and to 13 percent over the medium term, ensuring fiscal sustainability,” the Pakistani finance ministry said.

In June, Prime Minister Shehbaz Sharif’s government set a record-high tax collection target of Rs14.13 trillion ($47.4 billion) for the fiscal year 2025–26, marking a 9 percent increase from the previous year. Officials say meeting this goal is essential to reducing reliance on external debt and ensuring long-term fiscal sustainability.

Since then, the prime minister has approved modern digital ecosystem for the revenue watchdog to increase its collection and the launch of simplified digital tax returns to increase compliance and widen the country’s narrow tax base.

Pakistan’s economy has lately shown some signs of stabilization under a $7 billion IMF bailout. The program helped ease fears of default, strengthen foreign reserves and stabilize the rupee after two years of severe fiscal stress.

Inflation has eased from record highs, and the government is moving ahead with privatization, tax and energy reforms, and digitalization drives, all aimed at restoring credibility among investors and lenders.

The finance minister said the government’s disciplined fiscal management has restored confidence, improved sovereign spreads and contributed to the first current account surplus in 14 years.

“On monetary and exchange rate policy, Senator Aurangzeb reaffirmed the government’s commitment to maintaining a competitive, market-based exchange rate under the oversight of the State Bank of Pakistan, adding that productivity gains and structural reforms are as vital as external price competitiveness in sustaining export growth,” the finance ministry said.


’Super Flu’: Pakistan confirms presence of fast-spreading H3N2 influenza strain

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’Super Flu’: Pakistan confirms presence of fast-spreading H3N2 influenza strain

  • Health authorities say virus is not new but shows higher transmission rate
  • WHO reports global rise in seasonal influenza cases, especially in Europe

ISLAMABAD: Pakistani health authorities on Monday confirmed the presence of the H3N2 influenza strain, often referred to as a fast-spreading “super flu,” in the country, but stressed there was no cause for panic, saying the virus is not new and remains manageable with standard treatment and vaccination.

Officials said the strain is part of seasonal influenza viruses that circulate globally each year and has undergone genetic changes that make it spread more quickly, a pattern health experts say is common for influenza.

The confirmation comes as the World Health Organization (WHO) reports a global increase in seasonal influenza activity in recent months, with a growing proportion of influenza A(H3N2) cases detected, particularly across several European countries, including the United Kingdom.

“Yes, we have witnessed confirmed cases of H3N2 influenza (super Flu) in Pakistan since November this year. Out of total around 1,691 cases reported throughout Pakistan since last month, 12 percent are of the so called super flu,” Dr. Shafiq-Ur-Rahman, Senior Scientific Officer at Pakistan’s Center for Disease Control (CDC), told Arab News.

He said the virus had undergone a genetic drift, a gradual mutation that is typical of influenza viruses. 

“The symptoms are similar to other influenza strains, but speed of transmission is high for H3N2,” Rahman said, adding that treatment remains the same as for other flu types and vaccination is critical to limiting spread.

Seasonal influenza is an acute respiratory infection caused by influenza viruses that circulate year-round worldwide. The WHO has stressed that influenza continues to evolve through gradual genetic changes, making ongoing surveillance and regular vaccine updates essential.

Influenza spreads easily through droplets when infected people cough or sneeze. While most individuals recover within a week without medical treatment, the illness can range from mild to severe and may result in hospitalization or death, particularly among high-risk groups such as young children, older adults, pregnant women and people with underlying health conditions.

Doctors say early symptoms of the flu can resemble those of the common cold, but the progression often differs. Colds typically develop gradually, beginning with a runny or blocked nose, sneezing and sore throat, followed by mild coughing and fatigue.

Flu symptoms, however, tend to appear suddenly and more intensely, with patients often experiencing high fever, extreme tiredness, body aches, headaches and a dry cough.

Health experts say this abrupt and severe onset is usually the clearest indication that an illness is influenza rather than a common cold, which is generally milder and slower to develop.