Govt and IMF begin two-day workshop on tax reforms in Islamabad

ISLAMABAD: The Government of Pakistan, in collaboration with the International Monetary Fund (IMF), has begun a two-day high-level workshop to make the country’s tax system modern, simple, transparent and conducive to economic growth.

The workshop is being held in Islamabad on 20 and 21 October. Key proposals on tax reforms, higher revenues, the promotion of investment and harmonisation between the federal and provincial tax systems are being considered.

According to the Ministry of Finance, senior government officials, representatives of the IMF and the World Bank, international tax experts, academics and leaders of the private sector are taking part. Its main aim is to set policy priorities for a tax system that broadens the revenue base and also paves the way for greater business activity, investment and productivity.

Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb gave the opening remarks along with Jihad Azour, Director of the IMF’s Middle East and Central Asia Department, and Rodrigo Valdés, Director of its Fiscal Affairs Department.

Issues under discussion

The workshop will discuss issues such as the relationship between tax policy and economic growth, the modernisation of the current tax system, harmonisation of the sales tax system between the federation and the provinces, and making income tax simpler and more neutral.

The participants will also review measures to improve the capacity of tax administration, use digital technology, enforce tax laws and increase the confidence of taxpayers. Fiscal federalism and the prospects for raising provincial tax revenues will also be discussed, so that the revenue system can be made more effective and coordinated at the federal and provincial levels.

According to the Ministry of Finance, the workshop will focus on creating a broad, fair, simple and transparent tax system, which can help raise national revenues, improve the business environment and achieve the goals of sustainable economic growth.

At the end of the workshop, there will be a high-level panel discussion. It will consider consolidating the proposals that emerge during the various sessions, setting priority measures for the reform agenda, and devising a mechanism for continued contact and cooperation among the stakeholders concerned.

The workshop is part of efforts to advance tax reforms in Pakistan and to build a fiscal framework that makes the revenue system effective and also supports economic activity and sustainable development.