Finance Minister Muhammad Aurangzeb has signaled potential tax reforms aimed at easing the burden on the country’s salaried class. Speaking at the Pakistan Business Council’s (PBC) “Dialogue on the Economy,” Aurangzeb acknowledged the disproportionate tax burden on salaried workers and emphasized the need for a review of the current tax brackets. He clarified that this was a personal viewpoint and refrained from making definitive commitments.
However, the minister did pledge to simplify the tax filing process for salaried individuals to make it more convenient. He stressed that the government’s budget process for the fiscal year 2025-26, which begins in early January, will provide ample time for detailed discussions and consultations with business chambers scheduled for February and March. Feedback is expected by April.
Aurangzeb also stated that the government remains committed to its agreements with the International Monetary Fund (IMF), implying that any tax reforms would be implemented gradually. He expressed optimism about the country’s economic outlook, citing the recent 100 basis point reduction in the key policy interest rate by the State Bank of Pakistan (SBP), bringing the KIBOR rate down to approximately 11%.
He further mentioned that strong remittance inflows and IT services exports are expected to boost business confidence and may lead to an upgrade in Pakistan’s sovereign credit rating. The SBP also projects that foreign exchange reserves will reach $13 billion by the end of the fiscal year, providing about three months of import cover. The minister reiterated the government’s commitment to fiscal discipline through expenditure reduction and rightsizing policies.
