Finance Minister Muhammad Aurangzeb has hinted at potential tax reforms to alleviate the financial burden on the salaried class.
Speaking at the Pakistan Business Council’s (PBC) “Dialogue on the Economy,” Aurangzeb acknowledged that salaried workers face an unfair share of the tax burden and suggested that current tax brackets need to be reviewed. While emphasizing that these were his personal views and not official commitments, he pledged to simplify the tax filing process to create a more user-friendly experience for salaried individuals.
The minister outlined the government’s timeline for budget preparation for the 2025-26 fiscal year. Consultations with business chambers are set for February and March, with feedback to be finalized by April, allowing for detailed discussions before implementation.
Aurangzeb reaffirmed the government’s commitment to adhering to its agreements with the International Monetary Fund (IMF), signaling that any reforms would be introduced gradually. He expressed optimism about Pakistan’s economic outlook, supported by the State Bank of Pakistan’s (SBP) recent 100 basis point reduction in the key policy interest rate, which has lowered the KIBOR rate to around 11%.
The minister highlighted other positive developments, including strong remittance inflows and increasing IT services exports, which are expected to bolster business confidence and potentially lead to an improvement in Pakistan’s sovereign credit rating. Furthermore, the SBP projects foreign exchange reserves to reach $13 billion by the fiscal year’s end, offering approximately three months of import cover.
Aurangzeb reiterated the government’s dedication to fiscal discipline through expenditure reduction and policies aimed at rightsizing government operations.
