Finance, Energy and IT Ministers along with FBR Chairman address a joint press conference in Islamabad.
The screenshot shows the Minister of Energy and the Minister of Finance at a press conference. PHOTO: SCREEN CAPTURE / EXPRESS
Senior cabinet ministers have announced a series of far-reaching reforms in the areas of taxation, energy, privatization and digital governance aimed at stabilizing Pakistan’s economy and improving the efficiency of the State.
Finance Minister Muhammad Aurangzeb along with Federal Ministers Awais Leghari and Shaza Fatima Khawaja, Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial and Finance Secretary held a joint press conference in Islamabad on Monday.
Langrial reported a significant increase in the number of income tax payers. He said the total income tax gap amounts to Rp1.7 trillion, with the richest five percent of taxpayers accounting for Rp1.2 trillion. He noted that Prime Minister Shehbaz Sharif personally reviews the performance of FBR every Tuesday, ensuring accountability and results.
He added that the FBR has intensified its crackdown on the tobacco sector, where two law enforcement officers were martyred during operations, and that the Rangers are providing ground support. The FBR chairman also said that the institution has undergone major governance reforms, including categorization of officials into groups A, B and C based on their integrity and performance, and that the FBR has been freed from political and administrative interference.
Langrial reported that digitalization initiatives have significantly increased revenues, particularly in the sugar sector, which generated an additional Rs 75 billion. “The tax collected from retailers has increased from Rs 82 billion to Rs 166 billion,” the FBR chairman said. He added that sales tax collection increased by Rs 42 billion, while income tax revenue increased by Rs 43 billion, reflecting the impact of technology-driven tax enforcement.
The Minister of Finance announced that the meeting of the National Finance Commission will be held soon. Originally scheduled for September, it was postponed due to recent flooding, he said.
Electricity rate
Energy Minister Awais Leghari said the government had inherited an expensive power system, citing the depreciation of the rupee and capacity charges as key causes. “The cost of electricity is Rs 9.97 per unit, which is in line with global standards,” he said, adding that the government, under the leadership of the prime minister, reduced industrial tariffs by Rs 16 per unit.
Leghari announced that surplus power will be offered to consumers at Rs 7.5 per unit and a new electricity market system will become operational in January or February next year. “The government will no longer buy electricity directly,” he said, marking a historic move away from the power purchasing business.
He also revealed that the government is close to eliminating 1.2 trillion rupees in circular debt without overburdening consumers and, through negotiations with power producers, 3.6 trillion rupees in additional payments have been avoided until 2058. “These reforms prevented an increase of 6 rupees per unit in electricity tariffs,” he said.
Privatization campaign
Adviser to the Prime Minister on Privatization Muhammad Ali said the government’s privatization agenda is being implemented with renewed vigour. “The results of privatization will soon be evident through actions rather than promises,” he said.
He confirmed that Pakistan International Airlines (PIA) is leading the list of privatizations, with four consortiums currently in the bidding process, and the aim is to complete the privatization by the end of the year. “Our goal is to make PIA a global airline operated by investors willing to expand and modernize it,” he added.
Ali further said that talks are underway for privatization of 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 jobs, saving Rs 56 billion, and is planning further cuts. PASSCO and Utility Stores Corporation, both loss-making entities, are being dissolved.
“Nearly 300 state institutions have gone through due diligence,” he said, “and while unproductive organizations are being closed, valuable ones like the Pakistan National Archives and the Pakistan National Council for the Arts (PNCA) are being strengthened.” He added that in a recent meeting chaired by the Prime Minister, recommendations regarding 150 institutions were presented and none were rejected.
Cashless economy
Information Technology Minister Shaza Fatima Khawaja briefed the media about the government’s Digital Nation Pakistan initiative. He said Prime Minister Shehbaz Sharif is holding regular meetings for transition to cashless economy, for which three high-level committees have been set up.
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 widen the tax net and help prevent tax leakages,” he said.
He further revealed that the National Data Sharing Layer pilot project will be launched in December, and the National Database and Registration Authority will work quickly to complete the system.
The IT minister added that Pakistan’s current $400 billion economy could double to $800 billion, with half of it in the informal sector. He 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 eliminate the last obstacle to obtain the next tranche of 1.2 billion dollars from the International Monetary Fund (IMF), according to sources from the Ministry of Finance.
The government has assured the IMF that it will publish the Governance and Corruption Diagnostic Report by November 15, sources said. They added that Pakistan had already fulfilled all other conditions before the IMF Executive Board meeting. The IMF has been insisting on the prompt publication of the Governance and Corruption Diagnostic Report, and the technical aspects of the report are now being finalized, according to 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 program and $200 million for climate financing, the sources added. The Executive Committee meeting will be convened only after the release of the report, they said.
According to sources, the report identifies administrative weaknesses and corruption risks within government institutions. It also highlights concerns about weak rule of law and other governance issues. The report will also propose reforms aimed at addressing institutional weaknesses, and a formal implementation framework will be shared with the IMF, the sources said.
The report’s original release date was set for July but was later pushed back to August 2025, the sources revealed. During the recent economic review talks, the government had requested additional time from the IMF.
Aurangzeb stressed the importance of ongoing structural reforms, warning that failure to complete them could hamper Pakistan’s efforts to get relief from IMF conditions. “These reforms could not be implemented earlier. We are carrying them out now, and their completion will help Pakistan get relief from the IMF,” he said.
The Finance Secretary also highlighted reforms to retirement benefits for 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 was later reversed. Pakistan is currently working on implementing a similar direct contribution pension system for armed forces employees, he said.
