Finance Minister Calls Tax Asaan Scheme a ‘Paradigm Shift’ to Broaden Tax Base

Finance Minister Muhammad Aurangzeb on Tuesday described the launch of the Tax Asaan Scheme for traders as a “paradigm shift,” emphasizing the government’s effort to expand the tax net. Speaking on Geo News’ ‘Capital Talk’, he stated, “We kept the tax rate at 1% for traders because we have to start somewhere. However, it is part of a broader framework to expand the tax net, and we are moving in the right direction.”

Aurangzeb outlined a “new operating model” for tax collection featuring minimal human intervention, with a Central Processing Unit overseeing operations. He highlighted the use of comprehensive data compiled from third-party sources and tax records to address challenges systematically.

He noted the public’s positive reception of the budget and outlined the government’s focus on “enforcement and compliance” rather than introducing new taxes. Aurangzeb mentioned a digital product monitoring system, initially launched in the sugar sector at the prime minister’s request, and its planned expansion to beverages and textiles.

Upskilling Freelancers and Blockchain Technology

The minister emphasized the potential for Pakistani freelancers, currently earning $10–$12 per hour, to increase earnings to $50–$250 per hour through blockchain-related skills. He linked this to broader trends in Web 3.0, artificial intelligence, and cryptocurrency, all built on blockchain technology. Addressing cryptocurrency regulations, Aurangzeb stated the government is transitioning it into a regulated activity and pursuing tokenization.

US-Iran Deal Impact

On the US-Iran deal, Aurangzeb called it a “welcome development” and a “proud moment for Pakistan,” noting its positive effect on global markets. He cited falling oil prices to $80 per barrel and the government’s efforts to pass savings to the public, though quantifiable economic impacts remain uncertain. While acknowledging potential benefits from lifting Iran’s sanctions, he cautioned against premature conclusions, citing the need to await the agreement’s finalized details.

Economic Outlook and Fiscal Plans

Aurangzeb projected 4% GDP growth and 8.2% inflation for FY2026-27. He addressed opposition concerns about the budget process, asserting consensus on all details and openness to further questions. Regarding national debt, he highlighted a reduction to 70% of GDP and external debt of $96–97 billion, with 40–45% sourced from international lenders and the remainder from allies like China.

The Benazir Income Support Programme’s funding was increased to Rs838 billion, and he claimed tax revenues doubled from Rs7 trillion to Rs13 trillion year-on-year—a first in history.

Khyber Pakhtunkhwa Budget Dispute

Responding to KP’s demand for budget contributions through development spending cuts, Aurangzeb noted provincial consensus on IMF program cooperation. He deferred final decisions to the prime minister, referencing the FY2026-27 budget of Rs18.8 trillion, including Rs8,045 billion for debt servicing.

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