AI revolution to transform Pakistan’s tax system : FinMin Aurangzeb 

Finance Minister Muhammad Aurangzeb has said the government is introducing an artificial intelligence (AI)-powered tax

Finance Minister Muhammad Aurangzeb has said the government is introducing an artificial intelligence (AI)-powered tax administration system to improve tax compliance, automate taxpayer services, and reduce direct interaction between tax officials and citizens.

Speaking at the Pakistan Banking Summit 2026 in Karachi, the finance minister said Parliament had approved a new tax administration framework that would fundamentally change the way tax authorities engage with taxpayers. He said the new model would rely on artificial intelligence and digital technology to make the tax system more transparent, efficient, and less dependent on manual processes.

Aurangzeb said the AI-based framework would automatically generate tax notices and streamline several administrative functions. He added that the government was also preparing a medium-term tax strategy aimed at expanding the tax base, improving compliance, and creating a fairer taxation system.

Highlighting the country’s economic performance, the finance minister said Pakistan’s external sector remained stable, supported by strong remittance inflows. He expressed confidence that overseas Pakistanis would send between $41 billion and $42 billion in remittances during the current fiscal year, setting a new record.

He said the previous fiscal year ended with encouraging economic indicators, including a primary budget surplus, the lowest fiscal deficit in recent years, a debt-to-GDP ratio below 70 percent, and economic growth of 3.7 percent. He credited the improvement to stronger performance in the large-scale manufacturing sector.

Discussing exports, Aurangzeb acknowledged that overall export figures had declined. However, he said value-added exports, particularly textiles, continued to record year-on-year growth despite challenges faced by the food sector.

The finance minister also projected that Pakistan’s foreign exchange reserves would reach around $18.4 billion by the end of the fiscal year, exceeding earlier expectations.

Speaking about international financing, Aurangzeb said Pakistan had made significant progress toward issuing a Panda Bond, which would allow the country to access China’s capital markets. He described the initiative as an important step in diversifying Pakistan’s sources of external financing.

Commenting on the Pakistan Stock Exchange, he said the focus should remain on strong economic fundamentals rather than short-term market movements. He noted increasing participation by young investors and said improving corporate profitability reflected growing confidence in the economy.

Referring to the federal budget, Aurangzeb said it had been prepared under a new tax policy framework focused on export-led growth, tax reforms, affordable financing, and continued tariff reforms. He added that the government’s priorities included supporting businesses, encouraging investment, and improving economic competitiveness.

The finance minister said expanding access to finance for small and medium-sized enterprises (SMEs), exporters, farmers, manufacturers, the construction industry, and the information technology sector would remain essential for achieving sustainable economic growth.