Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb said on Saturday that after attaining economic stability, the country would now move towards growth, reported 24NewsHD TV channel.
Addressing post-budget press conference in Islamabad, Aurangzeb said “We have made significant progress towards economic growth,” he said and added the government has “made comprehensive efforts to create an enabling environment” for an export-led growth.
Direction of travel
The finance minister maintained that the federal budget 2026-27 firmly reinforced Pakistan’s “direction of travel” from economic recovery towards sustainable growth, with a strong focus on export-led expansion and creation of an enabling environment for businesses.
Commenting on the government’s economic trajectory, Aurangzeb said, “When we sat here last year, we spoke about economic recovery. Today, I can say that we have made meaningful progress and are now moving forward towards growth.”
He said the budget translated that vision into concrete policy actions, particularly by prioritizing export-led growth as a central pillar of economic strategy. “The main theme of this budget is export-led growth. A key question has been what constitutes the enabling environment for exports, and in this budget, we have made comprehensive efforts to address those factors,” he added.
The minister said that significant economic progress was made during the ongoing financial year (FY).
IT exports to climb to $4.5b
Speaking about tariffs, Aurangzeb said the government was in the second year of the five-year plan “in terms of bringing the cost down in terms of intermediate goods and the raw material”. He stressed the importance of reducing the “trade deficit for goods”, adding the services exports, particularly IT, were “becoming more and more important as we go forward”.
He said that IT exports were expected to reach $4.5 billion during the next FY. “This is why the government has announced to maintain the 0.25 percent Final Tax Regime (FTR) as per the discussions that came through the IT industry, freelancers and PASHA,” he said.
Aurangzeb emphasised that the government tried to “provide relief to the lowest segments of the salaried class”, recalling that the slabs of 5pc and 15pc to 1pc and 13pc, respectively.
Aurangzeb said that the construction sector had an important role to play in the economic development of the country. “The government has abolished all taxes in order to promote value addition in the agriculture sector,” the minister said, and added that an attempt had been made in the budget to provide relief to a segment of the population below the salaried class.
On taxation, the finance minister emphasised the aspects of “both deepening and broadening” the revenue collection.
Affirming that digital monitoring and other measures were already leading to additional revenues, he noted that a “new tax model” presented in the parliament yesterday was in design. “We want to take this towards automation and AI, and reduce human intervention,” he said, mentioning that the retailers’ scheme has been proposed to widen the tax base.
Taxation reforms
On taxation reforms, the minister highlighted a series of measures aimed at reducing the cost of doing business and strengthening the competitiveness of export-oriented sectors. He said the abolition of advance tax was a major step towards easing liquidity pressures on businesses, particularly exporters, while the rationalization of super tax signalled a clear policy shift towards a more growth-friendly tax regime.
“We have reduced the super tax rate for large businesses from 10 percent to 8 percent, which is a significant move in the right direction,” he said, adding this step had already received positive feedback from the business community.
He further clarified that the government had initially focused on revising the first slabs of the super tax, particularly for companies with income above Rs500 million, to ensure a more balanced and equitable approach.
Aurangzeb said that, following consultations and directions from the prime minister, additional relief would also be extended to certain sub-exporters by reducing or abolishing the super tax burden on them. “This proposal was presented to the prime minister and the cabinet, who specifically instructed that relief should be provided to sub-exporters as well,” he said, adding the measure would be formally incorporated in the winding-up speech to ensure its implementation.
He said these taxation measures were not isolated decisions but part of a broader policy direction aimed at incentivizing production, encouraging documentation and supporting industries that contribute to exports. “This is about setting the right direction of travel – moving towards a tax system that supports growth rather than constrains it,” he remarked.
Faceless system
The minister also highlighted the government’s focus on broadening and deepening the tax base through structural reforms. He said efforts were underway to introduce a modern tax operating model based on automation, artificial intelligence and reduced human intervention to improve efficiency and transparency.
“We want to move towards a technology-driven, faceless system in income tax and sales tax, similar to what has been introduced in customs,” he said, adding that digital monitoring was already yielding additional revenues and would play a key role in improving compliance going forward.
Noting that questions had been raised about economic growth, rather than stabilisation, Aurangzeb asserted: “We have fully utilised the fiscal space available to us. There is more to do. The feedback we have received so far is that we have set out on the path to economic progress.”
Agri financing crosses Rs2 trillion
Aurangzeb noted that agricultural credit and financing had risen by 15pc year-on-year (YoY) and the overall agri-financing has crossed Rs2 trillion. He highlighted that the Zarkhez-e Scheme for small farmers was collateral-free and was “moving in the right direction”.
The overall size of the Prime Minister’s Youth Business & Agriculture Loan Scheme (PMYB&ALS) was Rs262 billion, out of which Rs125 billion were allocated for agriculture, he noted.
The finance minister underscored the need for “value addition” in the equipment imported, such as combined harvesters, tractors and centrifugal pumps. “The customs duties and regulatory duties on all these things were reduced to zero,” he added.
On all duties, if we import agricultural equipment, combined harvesters, and other machinery needed by farmers and investors, wherever there is value addition and a need for machinery that is not locally produced, and we import it from abroad, then to increase productivity and address these needs, all customs duties and regulatory duties have been reduced to zero.
Aurangzeb stressed that improving export competitiveness goes beyond taxation. “It is also about access to affordable financing,” he said, adding that the government has allocated Rs71 billion subsidy to ensure exporters continue to receive financing at a concessional rate of 4.5 percent.
“This is a major feature of the budget. Despite policy rate and inflation dynamics, exporters will have access to financing at 4.5 percent, which runs into trillions of rupees,” he added.
The minister further elaborated tariff reforms as another critical component of the enabling environment. “In the second phase of tariff reforms, our focus is on reducing the cost of intermediate goods and raw materials to enhance export competitiveness,” he said.
Reiterating the broader policy direction, the minister said the government has utilized available fiscal space to promote a pro-business and pro-growth environment. “There is more to be done, but the direction of travel is clear – we are steadily moving towards economic growth,” he remarked.
Aurangzeb expressed confidence that the combination of tax rationalization, affordable financing, tariff reforms and structural improvements would help create a sustainable growth trajectory for the economy.
“This budget is not just about numbers; it is about direction, continuity and confidence in Pakistan’s economic future,” he added.
Energy sector
Aurangzeb said that there was stress on the energy sector, which would continue in the next fiscal year. He said the government was taking steps to encourage the private sector to contribute to the country’s economic growth.
The minister said that the trade deficit would be reduced through the export of services.
Speaking on the occasion, Minister of State for Finance and Railways Bilal Azhar Kayani claimed that the third budget presented by the government was people-friendly. “This is the budget for industrialists, labourers and salaried class,” he said, adding that the government had introduced measures in the budget to provide relief to the salaried class.
“Despite limited resources, the government has presented pro-people budget,” he added.
Speaking on the occasion, Federal Information Minister Ataullah Tarar said that the enemies of Pakistan were waiting for the country to become bankrupt. “However, the prime minister’s economic team did what was deemed impossible,” he said, adding that the PM always remained ready to provide relief to the common man.
FBR laying focus on digitalization
Replying to media men’s questions during the post-budget press conference, FBR Chairman Rashid Mahmood Langrial said the government was laying a strong digital foundation for tax administration reforms and the ongoing transformation of the revenue machinery would take two to three years to fully materialize.
He said FBR was among the earliest federal government organizations to adopt digital systems in the 1990s, but over time, its platforms became slow and fragmented and lacked integration. He acknowledged the contributions of previous FBR leadership in introducing digitalization, but said issues emerged over time due to weaknesses in the platform and deterioration in the quality of human resources managing it.
He said some customs functions had been shifted from Pakistan Revenue Automation Limited (PRAL) to the Pakistan Single Window (PSW), which had developed into a world-class organization. He credited those who established PSW for its success.
He said Prime Minister Shehbaz Sharif had directed the authorities to transform PRAL into an efficient organization. For this purpose, a highly qualified board had been appointed, which, according to him, comprised individuals with exceptional talent, integrity and professional achievements.
The chairman said PRAL’s senior management and C-suite team had been recruited from the market and included professionals who had led leading companies and possessed strong technical expertise.
He said the Ministry of Finance, under the prime minister’s instructions, had provided PRAL with substantial financial support to attract the required talent and technical resources.
Langrial said PRAL was recruiting professionals and, where necessary, obtaining services from top-tier companies through long-term contracts to strengthen its capabilities.
He, however, stressed that digitalization alone was not sufficient and that human resource development was equally important.
The chairman said Pakistan Customs and Inland Revenue Service (IRS) officers were undergoing specialized training programmes at the Lahore University of Management Sciences (LUMS), describing the initiative as significantly different from traditional government training arrangements.
He said scale-based courses had also been designed for in-service officers, adding that 131 officials had completed an intensive 21-day certification training programme.
Langrial said FBR was investing in human resource development and would acquire expertise from abroad wherever necessary to strengthen the institution.
He said the digital foundation for reforms should ideally have been established earlier, but substantial work had been undertaken during the last two and a half years. Several digital platforms were being developed and a new operating model, referred to in the budget speech, was also being introduced.
Explaining the need for reforms, he said previous attempts to separate functions within the organization had not succeeded because the system remained largely manual, with no digital logs or accountability mechanisms to track the movement of files and assign responsibility.
The chairman said a dedicated team was currently working on establishing a central data hub that would underpin FBR’s transformation agenda and support future reforms in revenue administration.
He added that building such a system was a long-term process and the transformation of revenue administration would require another two to three years to achieve the desired results.