Govt outlines reform roadmap for tax, energy and technology | The Express Tribune

Top cabinet ministers have announced a series of far-reaching reforms in the areas of taxation, energy, privatisation, and digital governance aimed at stabilising Pakistan’s economy and improving state efficiency.

Finance Minister Muhammad Aurangzeb, alongside Federal Ministers Awais Leghari and Shaza Fatima Khawaja, Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial, and Finance Secretary, addressed a joint press conference in Islamabad on Monday.

Langrial reported a significant increase in income tax filers. He said the total income tax gap stands at Rs1.7 trillion, with the top five per cent of taxpayers accounting for Rs1.2 trillion. He noted that Prime Minister Shehbaz Sharif personally reviews FBR’s performance every Tuesday, ensuring accountability and results.

He added that the FBR has intensified its crackdown on the tobacco sector, where two enforcement officers were martyred during operations, and that Rangers are providing on-ground support. The FBR chairman also said the institution has undergone major governance reforms, including the categorisation of officers into A, B, and C groups based on integrity and performance, and that the FBR has been freed from political and administrative interference.

Langrial reported that digitisation initiatives have significantly increased revenue, particularly in the sugar sector, which generated an additional Rs75 billion. The tax collected from retailers has increased from Rs82 billion to Rs166 billion,” said the FBR chairman. He added that the sales tax collections increased by Rs42 billion, while income tax revenue rose by Rs43 billion, reflecting the impact of technology-driven tax enforcement.

The finance minister announced that the National Finance Commission meeting will be held soon. Originally scheduled for September, it was postponed due to the recent floods, he said.

Electricity tariff

Energy Minister Awais Leghari said the government had inherited an expensive power system, citing rupee depreciation and capacity charges as key causes. “The cost of electricity is Rs9.97 per unit, which is aligned with global standards,” he said, adding that the government, under the prime minister’s guidance, reduced industrial tariffs by Rs16 per unit.

Leghari announced that surplus power will be offered to consumers at Rs7.5 per unit, and that a new electricity market system will become operational by January or February next year. “The government will no longer purchase electricity directly,” he said, marking a historic shift away from the power purchase business.

He also revealed that the government is close to eliminating Rs1.2 trillion in circular debt without burdening consumers, and through negotiations with power producers, Rs3.6 trillion in additional payments until 2058 have been avoided. “These reforms prevented a Rs6 per unit increase in power tariffs,” he stated.

Privatisation drive

Prime Minister’s Adviser on Privatisation Muhammad Ali said the government’s privatisation agenda is being implemented with renewed vigour. “The results of privatisation will soon be evident through actions rather than promises,” he said.

He confirmed that Pakistan International Airlines (PIA) is at the top of the privatisation list, with four consortiums currently in the bidding process, and the goal is to complete the privatisation by year-end. “Our aim is to make PIA a global airline operated by investors willing to expand and modernise it,” he added.

Ali further said that talks are underway for the privatisation of the House Building Finance Corporation (HBFC). He reported that the right-sizing of 20 ministries has been completed, work continues on nine more, and 10 ministries have been referred to a high-level committee for review. The government has already abolished 54,000 redundant posts, saving Rs56 billion, and is planning further cuts. PASSCO and Utility Stores Corporation, both loss-making entities, are being dissolved.

“Nearly 300 state institutions have undergone due diligence,” he said, “and while unproductive organizations are being closed, valuable ones such as the National Archives of Pakistan and Pakistan National Council of the Arts (PNCA) are being strengthened.” He added that in a recent meeting chaired by the prime minister, recommendations concerning 150 institutions were presented, and none were rejected.

Cashless economy

Information Technology Minister Shaza Fatima Khawaja briefed the media on the government’s Digital Nation Pakistan initiative. She said Prime Minister Shehbaz Sharif is holding regular meetings to transition towards a cashless economy, for which three high-level committees have been established.

The minister announced the establishment of a National Digital Exchange Layer, a unified platform where data from all relevant government agencies will be integrated. “This system will expand the tax net and help prevent tax leakages,” she said.

She further revealed that the pilot project of the National Data Exchange Layer will be launched in December, with the National Database and Registration Authority working rapidly to complete the system.

The IT minister added that Pakistan’s current $400 billion economy could potentially double to $800 billion, with half of it comprising the informal sector. She added that by June 2026, the digital payment system will be expanded to reach two million users. Pakistan’s current account deficit stands at $500 million, but officials say it remains manageable thanks to rising remittances, Finance Minister Muhammad Aurangzeb said.

IMF loan

The government has decided to remove the final obstacle to securing the next $1.2 billion tranche from the International Monetary Fund (IMF), according to sources in the Ministry of Finance.

The government has assured the IMF that it will publish the Governance and Corruption Diagnostic Report before November 15, the sources said. They added that Pakistan has already met all other conditions prior to the IMF Executive Board meeting. The IMF has been insisting on the early release of the Governance and Corruption Diagnostic Report, and the technical aspects of the report are now being finalised, according to the sources.

The IMF Executive Board meeting is expected to take place in December, where Pakistan’s $1.2 billion tranche will be approved. The disbursement includes $1 billion under the IMF programme and $200 million for climate financing, the sources added. The Executive Board meeting will be convened only after the report is published, they said.

According to the sources, the report identifies administrative weaknesses and corruption risks within government institutions. It also highlights concerns over weak rule of law and other governance issues. Reforms aimed at addressing institutional weaknesses will also be proposed in the report, and a formal implementation framework will be shared with the IMF, the sources noted.

The original release date for the report was set for July, later postponed to August 2025, the sources revealed. During the recent economic review talks, the government had requested additional time from the IMF.

Aurangzeb emphasised the importance of ongoing structural reforms, warning that failure to complete them could hinder Pakistan’s efforts to gain relief from IMF conditions. “These reforms could not be implemented before. We are pursuing them now, and their completion will help Pakistan secure IMF relief,” he said.

The finance secretary also highlighted reforms for retirement benefits of armed forces personnel, noting that early retirement is common in the military. He added that a direct contribution pension scheme had been introduced in a neighboring country but later rolled back. Pakistan is currently working on implementing a similar direct contribution pension system for armed forces employees, he said.