Key Points
- Pakistan sets goal to raise tax-to-GDP ratio to 15% by 2028
- Measures to include broadening of the tax base, digitisation, and stronger enforcement
- Policy aims to improve fiscal stability, reduce deficits, and support development projects
- Emphasis on expanding compliance among the formal sector and high-income earners
ISLAMABAD: Pakistan plans to achieve a 15 per cent tax-to-GDP ratio by 2028, signalling a commitment to enhance revenue mobilisation and strengthen fiscal sustainability.
The target forms part of a broader strategy to reduce the fiscal deficits, support infrastructure and social development projects, and improve economic governance.
Authorities plan to widen the tax base by bringing informal economic activities into the tax net and improving registration and documentation of businesses. Digitisation of tax collection and administration is expected to increase compliance and reduce leakages.
The government has also outlined measures to improve enforcement, including audits and monitoring mechanisms for high-income earners, corporations, and sectors with historically low compliance rates.
Fiscal stability and development impact
Raising the tax-to-GDP ratio is expected to provide a sustainable revenue stream for financing public investments in infrastructure, health, education, and social safety nets. Policymakers emphasise that higher mobilisation will reduce reliance on borrowing and lower debt-to-GDP pressures.
While the target is ambitious, analysts note that success will depend on effective implementation of policy, political will, and public confidence in transparent and fair taxation. Historically, compliance issues, exemptions, and administrative inefficiencies have constrained revenue mobilisation in Pakistan.
If successfully implemented, the reforms could mark a significant step towards fiscal consolidation and long-term economic stability. The government intends to periodically review progress and adjust measures to ensure that the 15% tax-to-GDP target is achievable by 2028.
