Budget to Feature Tax Relief, Bold Reforms: Finance Minister

ISLAMABAD: Finance Minister Muhammad Aurangzeb announced that the upcoming federal budget will introduce simplified tax returns for the salaried class and bold economic measures to strategically guide Pakistan’s economy while ensuring full support for the armed forces.

Simplified Tax Returns Aim to Ease Compliance for Salaried Class

Speaking to journalists after an event hosted by the Pakistan Banks Association and Karandaaz Pakistan, Aurangzeb emphasized that simplified tax returns are a key priority in the new budget. He said salaried individuals, most of whom receive income via bank transfers with taxes deducted at source, should not have to fill out extensive forms. The government plans to reduce required data points from over 140 to just nine, five for wealth tax and four for income tax.

The finance minister stressed that bold economic measures in the federal budget are intended to stabilize the economy long-term. He assured that the armed forces would receive all necessary support, citing recent cross-border aggression as a national concern.

Bold Economic Measures to Target Structural Reforms and Fiscal Discipline

On the IMF front, Aurangzeb confirmed that the mission had concluded in Islamabad, with discussions now continuing virtually. The IMF’s recent approval of Pakistan’s biannual review and additional funding was based strictly on merit, acknowledging the country’s adherence to structural reforms.

He dismissed concerns over a budget delay, stating that leadership had temporarily shifted focus to express gratitude to friendly nations supporting Pakistan amid rising tensions with India. Budget finalization would resume promptly upon their return.

Aurangzeb noted that Pakistan’s macroeconomic turnaround had earned global recognition. The government remains committed to tax, energy, SOE, and public finance reforms, resisting short-term fixes that could repeat past balance-of-payments crises.

Regarding taxation, he explained that reforms are now private-sector-led, focusing on technology-driven transparency to reduce human interference and eliminate tax evasion.

The minister acknowledged that privatization efforts for 24 state-owned enterprises handed over to the Privatisation Commission last year had underperformed. However, he assured that upcoming transactions, including those involving PIA, three power distribution companies, and several financial institutions, are expected to be completed by year-end.

Aurangzeb also highlighted that debt servicing remains the largest fiscal burden. To address this, the Debt Management Office is being revamped with a broader mandate to generate economic value rather than just cut interest costs.

He reiterated that the federal budget would include bold economic measures aimed at reshaping Pakistan’s financial DNA, steering away from short-lived liquidity injections and instead focusing on sustainable growth strategies.

Finally, he warned that population growth and climate change pose serious threats to Pakistan’s future. The government is actively collaborating with development partners and the IMF to support adaptation strategies in response.