Pakistan's tax-to-GDP ratio expected to hit 10.6% by June: FinMin

Finance Minister Muhammad Aurangzeb announced that Pakistan’s tax-to-GDP ratio is projected to reach 10.6% by the end of the current fiscal year—an improvement toward the government’s target of 13% under the 37-month Extended Fund Facility (EFF) with the International Monetary Fund (IMF).

Speaking during a session with S&P Global Ratings as part of Pakistan’s Sovereign Ratings Review, he outlined the government’s macroeconomic reform agenda and reiterated its commitment to sustainable and inclusive growth. The Finance Division later released a statement summarising the discussion.

He highlighted ongoing structural reforms across taxation, energy, state-owned enterprises (SOEs), privatisation, public finance management, and debt strategy. A key reform includes the separation of the Tax Policy Office from the Federal Board of Revenue (FBR), intended to shift tax policymaking toward value-based economic principles rather than administrative ease, the statement added.

Aurangzeb said inflation and the current account deficit (CAD) have remained stable throughout the year, contributing positively to macroeconomic stability. He pointed to surpluses in both the primary balance and the current account as important milestones, reflecting stronger economic fundamentals.

Pakistan’s external position is also improving, according to Aurangzeb, with foreign exchange reserves expected to climb to $14 billion by end-June—supported by institutional inflows, strong remittances, easing oil prices, and increased trade receipts.

He also shared insights from his recent visit to the US for the World Bank/IMF Spring Meetings, noting that international partners expressed support for Pakistan’s structural reform agenda and urged the government to maintain momentum and ensure long-term stability.