- Govt prepares medium-term strategy to boost tax compliance.
- Pakistan made progress on plans to issue Panda Bond: FinMin.
- Remittances expected to reach record $42 billion: Aurangzeb.
Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb on Tuesday hailed the new AI-driven tax administration framework as a fundamental shift that will automate taxpayer engagement and reduce human involvement.
Addressing the second edition of the Pakistan Banking Summit 2026 in Karachi, Aurangzeb said parliament had approved a new tax administration operating model aimed at transforming the relationship between tax authorities and taxpayers through technology-driven processes.
He said the new structure would introduce a different engagement model between the tax administration and taxpayers, with minimal human intervention.
Describing the reform as a major transformation, the minister said the model is powered by artificial intelligence and technology, with notices to taxpayers being generated through the new system. He added that the government would also unveil a medium-term tax strategy.
On the macroeconomic front, Aurangzeb said Pakistan’s current account performance remained strong, supported by record remittance inflows.
“We expect remittances for the current fiscal year to close between $41 billion and $42 billion,” he said.
The finance minister said the previous fiscal year ended on a strong note across key economic indicators, citing a primary surplus, an all-time low fiscal deficit, a debt-to-GDP ratio below 70%, and economic growth of 3.7% driven by a strong rebound in large-scale manufacturing (LSM).
Referring to exports, Aurangzeb acknowledged a decline in overall figures but noted that the contraction was concentrated in the food sector, while value-added exports, particularly textiles, continued to register year-on-year growth.
He expressed confidence that the country’s foreign exchange reserves would reach approximately $18.4 billion by the end of the fiscal year, exceeding earlier projections.
Discussing external financing initiatives, Aurangzeb said Pakistan made significant progress on plans to issue a Panda Bond, describing it as an important step towards accessing China’s capital markets.
“We have been pursuing the Panda Bond for seven to eight years. Not tapping the world’s second-largest and second-deepest capital market has been a missed opportunity,” he said.
Commenting on the Pakistan Stock Exchange, the minister said underlying market drivers were more important than headline index levels. He highlighted the growing number of investors, particularly among Gen Z, and noted that corporate profitability had returned to double-digit growth.
Turning to the federal budget, Aurangzeb said this year’s budget was prepared for the first time under the leadership of the Tax Policy Office after its transfer to the Finance Division.
He said the government’s priorities included export-led growth, the removal of advance tax and super tax, provision of low-cost subsidised financing, and continuation of tariff reforms. He thanked Prime Minister Shehbaz Sharif and the federal cabinet for supporting these measures.
Aurangzeb emphasised that access to finance would remain central to Pakistan’s transition from economic stabilisation to sustainable growth.
“Increased lending to SMEs, exporters, agriculture, manufacturing, construction and the IT sector will be mission-critical,” he said.
While acknowledging progress, the minister stressed that substantial work remained to be done.
Speaking on privatisation, Aurangzeb said that Pakistan International Airlines (PIA) was now securely in private-sector ownership. He added that roadshows for the privatisation of three electricity distribution companies had been completed, while 28 state-owned entities had been transferred to the Privatisation Commission for further action.
2026-07-07 19:38:00
