The Pakistani government has expressed its commitment to implementing ongoing tax reforms, aiming for a more predictable policy environment. Finance Minister Muhammad Aurangzeb reassured the American Business Council (ABC) during a meeting on Friday that structural tax changes are on the horizon. This meeting was attended by key members of the ABC, including executives from major US corporations in sectors like consumer goods, pharmaceuticals, energy, and tech.
Minister Aurangzeb emphasized the importance of continuous dialogue between the government and US multinationals. He mentioned that the government wants to hear early input from businesses to shape the budget for fiscal year 2025-26. Aurangzeb also revealed efforts to institutionalize the involvement of the private sector by strengthening a standalone Tax Policy Office and creating an advisory panel to ensure better policy-making.
Aurangzeb acknowledged the ongoing stability in Pakistan’s macroeconomy but warned that reforms are necessary to avoid falling into another IMF bailout. He outlined the government’s goal of broadening the tax net and shifting the tax burden away from compliant companies. He stressed the need for comprehensive reforms in the supply chain, including the digitization of the Federal Board of Revenue (FBR) to close tax loopholes.
The finance minister also highlighted that while financial support for these reforms is mostly secured, Pakistan is looking for technical expertise, particularly from US firms, to help drive innovation and efficiency in the country’s tax system. He invited collaboration from American companies to share their know-how in areas where Pakistan still requires assistance, beyond just financial aid.
The meeting concluded with a pledge from both sides to maintain open communication. The ABC expressed appreciation for the candid discussions, while also committing to continued cooperation with Pakistani authorities. Both parties agreed to work together on resolving bottlenecks and unlocking new opportunities for trade and investment in Pakistan.