Ahsan calls for fundamental transformation of tax system

ISLAMABAD: Federal Minister for Planning, Development and Special Initiatives Ahsan Iqbal on Thursday called for a fundamental transformation of Pakistan’s tax system, development planning and economic structure, warning that the country cannot achieve its ambition of becoming a USD 1 trillion economy by 2035 through business-as-usual policies. Chairing a meeting on the national economic mission of Uraan Pakistan, tax reforms and the digitisation of the economy, the minister said Pakistan must move at “digital speed” rather than progress at the pace of a tortoise if it wants to achieve rapid and sustainable economic growth. He said Mission 2 — Tax Reforms and Resource Mobilisation — was one of the 11 national economic missions approved by the National Economic Council (NEC) under Uraan Pakistan and served as the “financial engine” of the entire programme. “Without increasing revenues through reliable and effective sources, the resources required for the other 10 national economic missions cannot be provided, ” he said. The minister said the NEC, the country’s highest constitutional economic decision-making body, had approved all 11 missions with the overarching objective of transforming Pakistan into a USD 1 trillion economy by 2035. Iqbal said the targets set under Uraan Pakistan were achievable, but warned that meeting them would require transformation across every sector of the economy. “Achieving the USD 1 trillion economy target while maintaining the status quo will be extremely difficult, ” he said, adding that Pakistan would have to abandon conventional approaches and shift rapidly towards a technology-driven and digital economy. He acknowledged that the country had achieved economic stability but said the existing level of stability was not sufficient to ensure sustainable growth. The minister pointed to the shrinking development budget as a major challenge, noting that in 2018 the development budget represented a considerably higher proportion of the country’s gross national product than it does today. “If we are achieving stability with a development budget of Rs2 trillion, it cannot be described as complete economic stability, ” he said, stressing that Pakistan must expand the size of its economy to create greater fiscal space for development. Iqbal also questioned the sustainability of launching new development projects when existing schemes could not be completed. “If we cannot complete ongoing development projects, how will we start new ones? ” he asked. He said Pakistan’s development budget was continuously contracting while the existing budgetary structure offered limited room for increasing development expenditure. “Creating new resources for the economy and effectively mobilising existing resources is indispensable, ” he said. The minister stressed that fundamental tax reforms were essential for mobilising domestic resources and documenting the economy. He credited the government’s efforts, under the leadership of the prime minister, with significantly improving tax collection performance over the past two years. However, he said the major challenge was to increase the tax base and revenue collection while reducing tax rates. “Reducing the tax burden and increasing the number of taxpayers should be a priority of our economic policy, ” he said. Iqbal said digitalisation could play a central role in broadening the tax base, improving documentation and mobilising resources more efficiently. The planning minister also identified higher exports as one of Pakistan’s most urgent national priorities, saying the country could not achieve rapid economic growth without a substantial increase in exports. He directed the Ministry of Planning to develop, under the prime minister’s guidance, a comprehensive national development plan and provide it to relevant ministries to ensure effective implementation. The ministry’s analytical and research capabilities, he said, should be used to establish clear and measurable export targets. “We have to determine which sectors can generate how much in exports and what measures will be required to achieve those targets, ” he said. He emphasised that Pakistan must rapidly transition towards a technology-based economy, with tax reforms and economic digitalisation serving as key tools for increasing domestic resources, improving documentation and accelerating economic transformation. Copyright Business Recorder, 2026

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