Jihad Azour calls for neutral tax system to boost investment

Jihad Azour delivered an opening speech at a two-day conference regarding the national tax system. Azour stated that a more neutral tax structure allows productive firms to expand rather than remaining small or informal.

The official noted that a fairer system can encourage compliance while better services strengthen trust. Moving beyond cycles of adjustment toward a competitive, investment-friendly, and inclusive economy represents the ambitious reforms set by the government and supported by the IMF through the Extended Fund Facility.

Azour said, "When the tax system is simpler, more neutral and predictable, it lowers the cost of formality, improves resource allocations and gives businesses greater confidence to invest and grow." IMF management agreed to reduce withholding tax rates for the real estate sector in June 2026.

The IMF also endorsed a tax scheme for traders that permits cash transactions. As of 15 October 2026, 137 new retailers joined the trader scheme, contributing toward an annual target of 1,000,000 new participants.

Income tax collection from the real estate sector fell 38% to Rs35.2 billion during the first three months of the current fiscal year. The government reduced income tax for the realty sector by 50% after the sector paid Rs236 billion in income taxes in the last fiscal year.

The realty sector paid Rs200 billion in income taxes in fiscal year 2024. Punjab and Sindh collectively gathered Rs5.1 billion in agriculture income tax as of June 2026.

The Sindh government collected Rs1.1 billion in agriculture income tax in the last fiscal year against a target of Rs2 billion. The Punjab government collected Rs4 billion in agriculture income tax against a target of Rs10.5 billion in the last fiscal year.

Annual contributions from the salaried class rose to Rs629 billion as of June 2026, up from Rs391 billion before the IMF programme began. The prime minister shelved a plan to abolish the Federal Board of Revenue.

Planning Minister Ahsan Iqbal termed Pakistan's economic stabilisation as "stunted and borrowed".