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Pakistan’s efforts to modernize public services and tax administration through artificial intelligence are facing significant structural challenges, according to the Asian Development Bank (ADB). Fragmented data systems, weak coordination among agencies, limited institutional capacity, and low digital literacy are hindering the efficient implementation of technology-driven solutions.
The ADB’s observations were highlighted by Farzana Noshab, Lead Economics Officer at the Public Sector Management and Governance Sector Office, and Yuji Miyaki, Public Management Specialist (Taxation), in a recent blog post. They noted that improving government efficiency relies more on empowering officials to design and shape tools than on deploying complex systems.
Local Solutions for Public Services
Mehwish Salman Ali, CEO and Founder of Data Vault Pakistan and ZahanatAI, stressed the importance of local involvement in developing digital tools. According to her, public sector departments are increasingly exploring locally designed solutions, including AI-enabled chatbots, to structure databases and streamline services.
She highlighted the need for these systems to remain within the country, stored in local data centers, and integrated with domestic business and government data.
“Government agencies should be actively involved in shaping system functions rather than relying solely on external suppliers who may not fully understand local requirements,” she said.
Tax Administration Reforms
Recent reforms by the Federal Board of Revenue (FBR) illustrate how digitization can simplify public services. The FBR has introduced a user-friendly electronic tax return system with auto-fill features and is developing tailored forms for different taxpayer groups, including an Urdu-language version.
Other upgrades include real-time data sharing, automated withholding tax payments, and digital invoicing. These measures have reduced previously complex procedures to a few straightforward steps, making compliance easier for citizens and improving transparency and efficiency for officials.
According to the ADB, such reforms demonstrate that digital tools work most effectively when redundant steps are eliminated, documentation is standardized, and data formats are harmonized across agencies.
Digital Services
Dr. Noman Ahmad Said, CEO of SI Global Solutions, emphasized the importance of training officials and the public to use digital tools efficiently. He recommended developing online courses, university boot camps, and targeted training programs to ensure long-term adoption and sustainable results.
Multilingual chatbots and AI-enabled modules developed for tax services could eventually expand to other areas, such as health, employment, and disaster response. Planning for this expansion from the start will help integrate new tools across public services while avoiding exclusion of citizens with limited literacy or internet access.
Key Challenges
ADB experts noted that many digital initiatives in Pakistan rely on external suppliers who design solutions without fully engaging government staff. This can lead to slow adoption, lack of ownership, and systems that do not align with real-world needs.
To maximize the impact of modernization efforts, officials need to be involved from the planning stages, ensuring that tools address actual service delivery challenges and deliver tangible benefits to the public.
Pakistan’s public service reforms illustrate the potential of digital systems to enhance efficiency and transparency. However, structural gaps and capacity constraints must be addressed to ensure these initiatives benefit citizens effectively.
