Ahsan Iqbal Highlights Need for Greater Tax Collection in Pakistan

Federal Minister for Planning and Development, Ahsan Iqbal, has emphasized the importance of a robust tax system for the stability and growth of Pakistan’s economy. Speaking at a ceremony in Karachi, he pointed out that Pakistanis pay the least taxes in the world. Iqbal underscored that strong economies are founded on taxes, exports, and foreign investment, and urged the public to understand the crucial role taxes play in national development.

Economic Stability Achieved Through Difficult Decisions

Iqbal recalled that by April 1, 2022, Pakistan had faced an internal economic default, with fears of an external default also looming. He credited difficult economic decisions and public support for helping the country achieve macroeconomic stability. According to the minister, these measures have resulted in a significant drop in interest rates, falling from 22% to 11%, and prompted credit rating agencies to upgrade Pakistan’s economic outlook.

Challenges in Fiscal Management and Export Competitiveness

Despite recent improvements, Iqbal admitted that Pakistan continues to borrow to cover its expenses, with the budget deficit remaining above 6%. He expressed concern that the country’s exports still lag behind those of its competitors, highlighting the intense global competition for foreign investment. These challenges he said, must be addressed for Pakistan to realize its economic potential and avoid repeating past failures.

Progress in Fiscal Reforms and Defense Financing

Ahsan Iqbal highlighted progress made under the National Finance Commission (NFC) Award, noting that 60% of revenue is allocated to provinces, while the remaining 40% had been consumed by debt repayments as recently as two years ago. Through recent reforms, the government has created fiscal space of Rs 2,800 billion, which now allows full financing of defense expenditures totaling Rs 2,500 billion. The minister suggested that Pakistan is now poised for “a new takeoff,” provided that reforms continue and the country remains focused on building a solid economic foundation.