Pakistan has unveiled major structural economic reforms aimed at sustaining long-term stability, expanding the tax base, accelerating privatisation and modernising the energy and digital sectors, as officials said the IMF endorsement and credit rating upgrades reflect growing confidence in the country’s recovery path.
Earlier this week, Pakistan’s economic leadership outlined an extensive reform agenda aimed at ensuring long-term fiscal stability, expanding the tax base, improving governance in the energy sector, and accelerating privatisation to support sustained economic recovery.
Finance Minister Muhammad Aurangzeb said the government’s ongoing engagement with the IMF has reinforced confidence in Pakistan’s economic direction, while three global credit rating agencies have acknowledged improvements in macroeconomic indicators.
“Pakistan’s economy is now moving on a stable trajectory,” Aurangzeb said, adding that the government’s reform push is focused on structural transformation rather than temporary stabilisation measures.
Tax Reforms and Fiscal Discipline
The government has set a target to raise the tax-to-GDP ratio to 18 percent by 2028 without introducing new taxes. Aurangzeb said the Federal Board of Revenue (FBR) is prioritising enforcement, documentation, and digital compliance.
FBR Chairman informed that Pakistan has recorded a 1.5 percent rise in tax-to-GDP ratio, with the number of taxpayers increasing to 5.9 million nationwide this year. He reiterated that the government will focus on compliance and enforcement instead of additional taxation.
To support field operations, Rangers personnel have been deployed for the security of FBR enforcement teams.
The government has also abolished 54,000 vacant posts as part of its fiscal consolidation and right-sizing initiative.
Energy Sector Overhaul
Energy Minister announced that the government plans to withdraw from electricity purchasing, marking a shift towards a market-based power model. He said electricity tariffs have been reduced by Rs10.5 per unit over the past 18 months as part of relief measures.
Pakistan has lowered circular debt by Rs700 billion through governance improvements and plans to clear the remaining Rs1.2 trillion within six years. An automated prepaid electricity metering system will be rolled out nationwide by 2028 to curb losses and improve billing transparency.
Privatisation and State-Owned Enterprise Reforms
The privatisation programme is advancing under a transparency framework, the government said. The First Women Bank has been sold to a UAE-based company for Rs5 billion, while four consortiums have been shortlisted for Pakistan International Airlines (PIA).
PASSCO will be permanently closed due to persistent financial losses, officials said.
Digital Economy Push
The government has pledged rapid movement toward a secure, cashless digital economy. The Digital Nation Pakistan Act aims to streamline coordination among government institutions, while the Raast payment system is expected to enhance secure and low-cost digital transactions across the country.
Authorities said ongoing digitalisation efforts will expand the tax base, improve fiscal transparency, and integrate national data systems to strengthen compliance and governance.
