Finance, Energy and IT Ministers talk to FBR Chairman at a joint press conference in Islamabad
Screen grab shows the Minister of Energy and Finance in a press briefing. PHOTO: SCREEN GRAB/ EXPRESS
Top 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 state efficiency.
Finance Minister Muhammad Aurangzeb, along with Federal Ministers Awais Leghari and Shaza Fatima Khawaja, Chairman of the Federal Board of Governors (FBR) Rashid Mahmood Langrial, and Finance Secretary, addressed a joint press conference in Islamabad on Monday.
Langrial reported a significant increase in income taxes. He said the total income tax gap is Rs 1.7 trillion, with the top five percent of taxpayers accounting for Rs 1.2 trillion. He noted that Prime Minister Shehbaz Sharif personally reviews the performance of the FBR every Tuesday, ensuring accountability and results.
He added that the FBR has intensified its efforts against the tobacco sector where two enforcement officers were martyred during operations and that Rangers are providing ground support. The FBR chairman also said that the institution has undergone major governance reforms, including categorization 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 digitization initiatives have significantly increased revenue, particularly in the sugar sector, which generated an additional Rs 75 billion. The tax collected from retailers has increased from Rs82 billion to Rs166 billion,” the FBR chairman said. He added that 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 recent flooding, 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 reasons. “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 Prime Minister’s guidance, reduced industrial tariffs by Rs16 per unit. unit.
Leghari announced that excess power will be offered to consumers at Rs7.5 per unit and a new electricity market system will become operational by January or February next year. “The government will no longer buy electricity directly,” he said, marking a historic shift away from the power purchase business.
He also revealed that the government is close to eliminating Rs 1.2 trillion in circular debt without burdening consumers, and through negotiations with power producers, Rs 3.6 trillion in additional payments until 2058 have been avoided. “These reforms prevented a Rs6 per unit increase in power prices,” he said.
Privatization drive
Prime Minister’s Adviser 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 at the top of the privatization list, with four consortia currently in the tender process, and the aim is to complete the privatization before the end of the year. “Our aim is to make PIA a global airline run by investors who are willing to expand and modernize it,” he added.
Ali further said that negotiations are underway for the privatization of the House Building Finance Corporation (HBFC). He reported that the right sizing of 20 ministries has been completed, work is continuing on nine more and 10 ministries have been referred to a high-level committee for review. The government has already eliminated 54,000 redundant posts, saving Rs.56 billion, and is planning further cuts. PASSCO and Utility Stores Corporation, both loss-making entities, are being wound up.
“Nearly 300 government institutions have undergone due diligence,” he said, “and while unproductive organizations are being closed down, valuable organizations such as the Pakistan National Archives and the Pakistan National Council of the Arts (PNCA) are being strengthened.” He added that in a recent meeting chaired by the Prime Minister, recommendations were made regarding 150 institutions and none were rejected.
Cashless economy
Information Technology Minister Shaza Fatima Khawaja briefed the media about the government’s Digital Nation Pakistan initiative. She said Prime Minister Shehbaz Sharif is holding regular meetings to transition to a 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 public authorities will be integrated. “This system will widen the tax net and help prevent tax leakages,” she said.
She further revealed that the pilot project for the National Data Exchange Layer will be launched in December, with the National Database and Registration Authority working quickly to finalize 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 is 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 clear the final hurdle to securing the next $1.2 billion tranche from the International Monetary Fund (IMF), according to Finance Ministry sources.
The government has assured the IMF that it will publish the Governance and Corruption Diagnostic Report by November 15, the sources said. They added that Pakistan has already fulfilled all other conditions ahead of the IMF Executive Board meeting. The IMF has insisted on an 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 meeting is expected to take place in December, where Pakistan’s $1.2 billion tranche will be approved. The payout includes $1 billion under the IMF program and $200 million for climate finance, the sources added. The board meeting will be called only after the report is published, they said.
According to the sources, the report identifies administrative weaknesses and corruption risks in 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 pushed back to August 2025, the sources revealed. During the latest economic review talks, the government had requested additional time from the IMF.
Aurangzeb emphasized the importance of ongoing structural reforms and warned that failure to implement them could hinder Pakistan’s efforts to obtain relief from IMF conditions. “These reforms could not be implemented before. We are pursuing them now and their completion will help Pakistan secure IMF assistance,” he said.
The finance secretary also highlighted reforms to pension 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 later rolled back. Pakistan is currently working on implementing a similar direct contribution pension system for armed forces personnel, he said.
