Federal Minister for Finance and Revenue, Muhammad Aurangzeb, announced on Thursday that Pakistan aims to achieve a tax-to-GDP ratio of up to 13 percent by 2027, noting that the current ratio of below 10 percent is unsustainable.
During a post-budget press conference, the finance minister emphasized the necessity of gradually increasing the tax-to-GDP ratio to 13 percent over the next three years. He highlighted that according to international benchmarks, no country can sustain a 9.5 percent tax-to-GDP ratio without external assistance, thus underscoring the urgent need to enhance this ratio.
Aurangzeb also stressed the importance of eliminating the undocumented economy through comprehensive digitization to minimize human intervention, thereby making the tax system more transparent and reducing opportunities for corruption.
He acknowledged that the Federal Board of Revenue (FBR) has fallen short in terms of compliance and enforcement, admitting that more should have been done in these areas.
