Tax Reform and Pakistan’s Economic Competitiveness: PTBA team holds policy dialogue with Oxford economist

KARACHI: A delegation of the Pakistan Tax Bar Association (PTBA) held a substantive policy discussion with Professor Stefan Dercon, Professor of Economic Policy at the Blavatnik School of Government and the Department of Economics, University of Oxford, and Shehreyar Aziz, Economic Adviser at the British Deputy High Commission, Karachi, focusing on Pakistan’s economic reform trajectory, tax administration, digitalisation, investment climate and the measures required to support sustainable economic growth. The PTBA delegation comprised Anwar Kashif Mumtaz, Advocate Supreme Court of Pakistan and Former President PTBA; Shiraz A. Khan, Advocate High Court and Treasurer PTBA; and Muhammad Rehan Siddiqui, FCA and Senior Vice President PTBA. The discussion provided an opportunity to present a practitioner’s perspective on the implementation of Pakistan’s ongoing economic and taxation reforms and their impact on taxpayers, businesses and investment. The PTBA delegation observed that Pakistan has entered an important phase in its reform process where the focus must increasingly shift from policy formulation to effective implementation. READ ALSO: Min tax liability issues in new return form: PTBA urges FBR to correct computation The Federal and Provincial Budgets for 2026–27, together with ongoing initiatives relating to digital invoicing, documentation, data integration and technology-led tax administration, demonstrate that digital transformation is no longer a future objective but an ongoing reality. PTBA emphasised that the success of this transformation will depend not only upon technology, but equally upon the institutional and human capacity required to understand, administer and implement it effectively. The delegation highlighted the need for coordinated capacity-building across the entire tax ecosystem, including tax administrations, taxpayers, tax professionals, the legal fraternity and adjudicatory institutions, so that technological advancement is accompanied by corresponding institutional understanding. The delegation discussed the need to assess the performance of tax administration through a broader set of indicators rather than revenue collection alone. While revenue mobilisation remains essential for Pakistan’s fiscal sustainability, PTBA suggested that administrative performance should increasingly also be evaluated through indicators such as: – quality and sustainability of tax assessments; – timely processing of legitimate refunds; – implementation of appellate orders; – resolution of system-related difficulties; – reduction in unnecessary disputes and compliance costs; and- improved taxpayer facilitation and voluntary compliance. The delegation emphasised that an efficient tax system must seek to collect the correct amount of tax through predictable, transparent and efficient administration, while facilitating legitimate economic activity. The discussion also addressed the need to improve the relationship between taxpayers and tax administrations. PTBA emphasised that sustainable tax compliance ultimately requires greater certainty, transparency, institutional capacity and mutual confidence between the State and taxpayers. Particular emphasis was placed on continuous professional and technical training of tax officials and other stakeholders to meet the requirements of an increasingly digital and data-driven taxation environment. The delegation discussed the continued circulation of undocumented economic activity and the need to accelerate Pakistan’s transition towards a more documented and cashless economy. It was observed that distortions between documented and actual economic values, particularly in certain asset and property transactions, can encourage informality and undermine effective documentation. PTBA therefore emphasised the importance of policies that progressively bring economic activity into the documented system while creating a meaningful distinction between compliant and non-compliant economic behaviour. The objective, the delegation stressed, should be to broaden the economic and tax base rather than disproportionately increasing the burden upon those already within the documented sector. The discussion also covered the cumulative impact of taxation, withholding mechanisms, federal and provincial levies and compliance requirements upon the cost of doing business. PTBA emphasised the importance of a stable and predictable tax framework capable of supporting investment, enterprise and competitiveness while meeting the Government’s legitimate revenue requirements. The delegation observed that sustainable revenue growth is ultimately linked with the expansion of economic activity and therefore emphasised the need for policies aimed at expanding the economic pie, encouraging investment and enterprise, and broadening the tax base. PTBA also highlighted the importance of strengthening institutional mechanisms through which recurring administrative difficulties can be identified and corrected. In this context, the delegation discussed the potential for institutions such as the Federal Tax Ombudsman to play an enhanced role in identifying recurring patterns of maladministration and providing structured feedback for improvement in tax administration, systems and taxpayer facilitation. The underlying objective should be that individual disputes and complaints do not merely result in individual relief, but, where appropriate, also contribute towards ‘institutional learning and systemic improvement’. Professor Dercon engaged with the issues raised by the delegation and shared perspectives drawn from international experience on economic reform, institutional capacity, digital transformation and effective implementation. The discussion recognised that technology and digitisation can significantly strengthen economic governance when accompanied by appropriate institutional capacity, effective implementation and an enabling environment for productive economic activity. The meeting concluded with a shared appreciation of the value of continued engagement between policymakers, economists, tax professionals and other stakeholders in identifying practical measures capable of supporting Pakistan’s economic development and improving its investment and business environment. Copyright Business Recorder, 2026

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