The federal government is planning to provide relief to the salaried class and registered businesses in the upcoming federal budget, while remaining confident that Pakistan’s economic growth will outperform international estimates this year, Adviser to the Finance Minister Khurram Shahzad said.
Speaking in a special interview on a news channel, Shahzad said targeted measures are being prepared to ease pressure on salaried individuals and compliant businesses.
He added that work is also underway to reduce energy tariffs and rationalise tax rates, as the government shifts its focus toward providing tangible relief to taxpayers who are already within the documented economy.
On economic performance, the adviser said Pakistan’s growth rate will exceed projections made by global institutions, including the International Monetary Fund.
He projected GDP growth of up to 4 percent in the current fiscal year, rising to around 5 percent next year. He also said remittances are expected to cross $41 billion, providing strong support to the country’s external account.
Discussing engagement with the IMF, Shahzad said preparatory work is ongoing for the next economic review. He acknowledged that Pakistan has historically had to return to the IMF every few years due to structural weaknesses, but stressed that this time the government is pursuing a cautious and sustainable economic policy aimed at avoiding repeated balance-of-payments crises.
He further said that 24 state-owned enterprises that are placing a heavy burden on public finances will be privatised, in line with structural benchmarks agreed with the IMF.
On inflation and household pressures, Shahzad said inflation has eased significantly, falling from 25–30 percent to around 5 percent. He said the government’s broader objective is to increase the earning capacity of citizens, adding that greater stability is expected to help boost exports and strengthen long-term growth.
Separately, in a post on X, the finance adviser highlighted weaknesses in tax collection, particularly at the provincial level. He said the federation collected Rs13 trillion in taxes and levies last year, taking the federal tax-to-GDP ratio to 11.3 percent
By contrast, he noted that the global benchmark is around 18 percent, while Pakistan aims to raise its federal ratio to 15 percent by June 2028.
He pointed out that provinces collected only Rs979 billion in taxes last year, equivalent to just 0.85 percent of GDP, despite an expectation that provinces should contribute at least 3 percent.
To meet this target, Shahzad said provincial tax revenues would need to triple by 2028, adding that the real issue lies not in the size of the tax base, but in the weak revenue generated from it.