Pakistan is preparing to introduce an artificial intelligence powered tax administration framework that will automate taxpayer engagement and generate tax notices with minimal human involvement, according to Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb. Speaking at the second edition of Pakistan Banking Summit 2026 in Karachi, the finance minister described the new model as a significant shift in the way tax authorities interact with taxpayers, with technology and AI becoming central to the country’s future tax administration processes.
Aurangzeb said parliament had approved a new tax administration operating model designed to transform the relationship between tax authorities and taxpayers through technology driven systems. According to the minister, the new framework will establish a different engagement model where human intervention is kept to a minimum and taxpayer notices are generated through an AI enabled system. He added that the government is also preparing a medium term tax strategy aimed at improving compliance and enhancing the efficiency of revenue collection. The initiative forms part of Pakistan’s broader digital transformation efforts, with authorities increasingly turning to advanced technologies to modernize public sector services and improve administrative processes.
The finance minister also shared updates on the country’s macroeconomic performance, noting that Pakistan’s current account position remained strong due to record remittance inflows. He said remittances for the current fiscal year are expected to close between $41 billion and $42 billion. Aurangzeb stated that the previous fiscal year ended on a positive note across several economic indicators, including a primary surplus, an all time low fiscal deficit, a debt to GDP ratio below 70 percent, and economic growth of 3.7 percent supported by a strong rebound in large scale manufacturing. Addressing export performance, he acknowledged a decline in overall export figures but noted that the contraction was concentrated in the food sector, while value added exports, particularly textiles, continued to register year on year growth. He also expressed confidence that Pakistan’s foreign exchange reserves would reach approximately $18.4 billion by the end of the fiscal year, exceeding earlier projections.
Discussing external financing initiatives, Aurangzeb said Pakistan had made considerable progress on plans to issue a Panda Bond, describing access to China’s capital markets as an important opportunity for the country. He noted that efforts to launch the Panda Bond had been under way for seven to eight years and said Pakistan had missed the opportunity to tap one of the world’s largest capital markets. On the Pakistan Stock Exchange, the minister highlighted the increasing participation of investors, particularly from Gen Z, and said corporate profitability had returned to double digit growth. He further stated that this year’s federal budget was prepared under the leadership of the Tax Policy Office following its transfer to the Finance Division and identified export led growth, the removal of advance tax and super tax, low cost subsidized financing, and tariff reforms among the government’s key priorities. Aurangzeb also emphasized that access to finance for small and medium enterprises, exporters, agriculture, manufacturing, construction, and the information technology sector would remain central to Pakistan’s transition from economic stabilization to sustainable growth, while noting progress on privatization initiatives involving Pakistan International Airlines and several state owned enterprises.
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