Deputy Prime Minister Ishaq Dar to lead committee responsible for making new budget, finalizing taxes and tax relief, as government prepares to present budget in National Assembly.
The government has handed over the responsibility of making the new budget to Deputy Prime Minister Ishaq Dar, after finding the initial work below par. This decision comes as the International Monetary Fund (IMF) begins its scrutiny of the new tax proposals. A committee led by Dar has been constituted to review, analyze, and present tax policy proposals formulated by the Tax Policy Office. The committee will also evaluate the legal, administrative, and operational feasibility of the proposed tax measures and assess their potential impact on revenue generation, industry, exports, investment, inflation, and the overall economy.
The committee's formation marks a significant shift in the budget-making process, with Dar now holding the final responsibility for finalizing roughly Rs215 billion to Rs230 billion in new taxes and granting any tax relief. Finance Minister Muhammad Aurangzeb has been made a member of the Dar-led committee, which also includes other key officials such as Minister for Economic Affairs Ahad Khan Cheema, Planning Minister Ahsan Iqbal, and Minister of State for Finance Bilal Azhar Kayani. The government plans to present the budget in the National Assembly soon after Eid holidays, once it is finalized by both the IMF and Dar.
The decision to place Dar at the head of the budget committee and Cheema at the head of the enforcement committee suggests that budget-making responsibility no longer rests with the Finance Minister. The government is under pressure to introduce Rs430 billion worth of measures in the new budget, including at least Rs215 billion in additional taxes and another Rs215 billion through enforcement measures. The enforcement committee, led by Cheema, has also held its first meeting and discussed key proposals, including the introduction of digital monitoring mechanisms and AI-based systems to detect false data in tax returns.
The IMF has also begun its scrutiny of the new tax proposals, with the visiting mission led by Mission Chief Iva Petrova emphasizing the importance of sustaining reform momentum, maintaining fiscal discipline, and advancing structural reforms to support durable and inclusive economic growth. The government's key interlocutor with international financial institutions, Muhammad Aurangzeb, briefed the IMF mission on Pakistan's macroeconomic outlook, fiscal strategy, reform priorities, and ongoing efforts to ensure sustainable economic stability and long-term growth. The discussions focused on macroeconomic stabilization efforts, preparations for the upcoming federal budget, and the broader reform agenda aimed at strengthening fiscal and external sustainability while fostering sustainable economic growth.
The government's commitment to broadening the tax base, revenue optimization, enhancing transparency, and modernizing the tax administration system is expected to promote sustainable economic growth and fiscal stability. The introduction of digital monitoring mechanisms and AI-based systems is also expected to help generate at least Rs215 billion from enforcement measures, which will contribute to the next fiscal year's tax collection target of about Rs15.3 trillion. As the budget-making process moves forward, it remains to be seen how the government will balance the need for revenue generation with the need to support economic growth and development.
The government's decision to hand over the budget-making process to Dar is seen as a significant move, given his experience as a former finance minister. The committee's work will be closely watched, as it will have a significant impact on the country's economic future. The government's ability to finalize the budget and present it to the National Assembly will be a key test of its ability to manage the economy and implement reforms. As the country moves forward, it is clear that the budget-making process will be a critical component of the government's economic strategy, and the outcome will have far-reaching implications for the country's economic growth and development.
