Government Focuses on Tax Recovery, Panda Bonds, and Institutional Reforms
Finance Minister Muhammad Aurangzeb has confirmed that no new taxes will be imposed in the near term. Instead, the government is confident that recoveries from ongoing tax-related court cases could bring significant revenue.
While addressing the Senate Standing Committee on Finance, the minister emphasized that Pakistan’s discussions with the International Monetary Fund (IMF) are moving forward positively. According to him, the talks so far have been constructive, and the government is fully committed to raising the tax-to-GDP ratio to 11 percent.
Economy Shows Stability Through Eurobond Repayment
Aurangzeb highlighted that Pakistan has achieved macroeconomic stability. He pointed to the recent repayment of Eurobond obligations as evidence of fiscal discipline and improved economic management. “Despite speculation, the economy is moving in the right direction,” he remarked during the briefing.
The minister reassured that the country’s external financial commitments are being managed responsibly. The successful repayment, he said, has boosted investor confidence and reflects the government’s strong commitment to maintaining credibility in international markets.
Panda Bond Issuance with China Expected by November
Alongside fiscal management, Aurangzeb provided updates on progress with China regarding Panda Bonds. He said that the government plans to issue $250 million worth of Panda Bonds by the end of November. This issuance will form part of a broader billion-dollar investment program aimed at strengthening Pakistan’s external financing options.
According to him, the Panda Bond initiative will not only diversify funding sources but also deepen economic ties with China. The step is seen as part of the government’s broader strategy to access new international markets for financing.
Institutional Reforms and Tax Policy Shift
Aurangzeb also spoke about reforms within the Federal Board of Revenue (FBR). He confirmed that the formulation of tax policy has been shifted to the Finance Division. A new Tax Policy Office will now prepare the federal budget instead of the FBR.
The minister added that Prime Minister Shehbaz Sharif is personally monitoring FBR’s restructuring. Weekly and monthly progress reports are being shared with the Prime Minister’s Office. Hiring for the new Tax Policy Office is almost complete, and an advisory board consisting of parliamentarians and private sector experts will soon be established.
These reforms are expected to bring clarity in tax policy, improve governance, and strengthen institutional frameworks for long-term revenue growth.
Pakistan’s economic management strategy under Aurangzeb is focused on avoiding additional tax burdens, ensuring international credibility, and pursuing institutional reforms. With IMF talks progressing positively and new funding options on the horizon, the government aims to build on recent stability.
The finance minister expressed confidence that the combination of Eurobond repayment, Panda Bond issuance, and tax reforms would create stronger foundations for sustainable growth.
