Adviser to the Federal Finance Minister Khurram Shahzad has promised relief for the salaried and registered business class in the upcoming federal budget, while expressing confidence that Pakistan’s economic performance will exceed international estimates this year.
In a special conversation with Samaa TV, Khurram Shahzad said the government is preparing targeted relief for the salaried segment and registered businesses in the next budget. He said work is also underway to reduce energy tariffs and rationalize tax rates.
Responding to questions about public benefits despite government claims of economic stability, he said the focus is now shifting toward easing the burden on compliant taxpayers.
Economic growth to beat global estimates
The finance adviser said Pakistan’s economic growth in the current fiscal year will be higher than projections made by international financial institutions, including the International Monetary Fund. He projected GDP growth of up to 4% this year and around 5% in the next fiscal year.
He added that remittances are likely to exceed $41 billion, providing strong external support to the economy.
IMF talks, cautious economic policy
Shahzad said preparatory work is underway for the next economic review talks with the IMF. He noted that Pakistan has had to approach the IMF every two to three years due to structural weaknesses.
“This time, a cautious economic policy is being implemented for sustainable development,” he said, stressing that reforms are designed to avoid repeated balance-of-payments crises.
The adviser revealed that 24 state-owned institutions that are a burden on the national exchequer will be privatized. He said the privatization plan is part of the IMF’s structural benchmarks agreed under the ongoing program.
He added that reforms are also underway in government institutions, including right-sizing measures and deep restructuring of the energy sector.
Inflation, exports, earning capacity
Shahzad said inflation has fallen sharply from 25–30% to around 5%. He said the government’s ultimate goal is to increase the earning capacity of the Pakistani people.
With further economic stability, he said exports are expected to rise, helping strengthen Pakistan’s long-term growth outlook.
Separately, in a message shared on X, Khurram Shahzad highlighted serious issues in tax collection, particularly at the provincial level. He said the federation collected Rs13 trillion in taxes and levies last fiscal year, bringing the federal tax-to-GDP ratio to 11.3%.
He noted that the international benchmark for tax-to-GDP ratio is around 18%, while Pakistan aims to raise the federal ratio to 15% by June 2028.
Provinces urged to boost tax effort
The adviser said provinces collected only Rs979 billion in taxes last year, amounting to just 0.85% of the economy. He said provinces are expected to contribute at least 3% to the overall tax-to-GDP ratio.
To meet this target, he said provincial tax collections will need to triple by 2028. “The real problem is not the tax base, but the revenue generated from it,” he added.
