PTBA urges government to focus on tax reform implementation

The Pakistan Tax Bar Association (PTBA) has urged the government to shift its tax reform focus from policy formulation to effective implementation, arguing that institutional capacity, taxpayer facilitation and digitalization will be critical to improving Pakistan’s tax system, investment climate and economic competitiveness.

What does PTBA want from Pakistan’s tax reform?

PTBA wants tax reform to focus more heavily on implementation, institutional capacity and taxpayer service rather than policy design alone. It says digital systems will work only if tax authorities, professionals and other institutions can administer them effectively, while performance should be judged on more than revenue collection.

The association made the recommendations during a policy discussion with Stefan Dercon, Professor of Economic Policy at the University of Oxford, and Shehryar Aziz, economic adviser at the British Deputy High Commission in Karachi.

The discussion covered Pakistan’s tax administration, digitalization, investment climate, economic competitiveness and measures to support sustainable growth, according to a PTBA statement issued in September.

PTBA said its delegation included Anwar Kashif Mumtaz, advocate of the Supreme Court and former PTBA president; Shiraz A. Khan, advocate of the High Court and PTBA treasurer; and Muhammad Rehan Siddiqui, FCA and senior vice president of the association.

The association said the 2026-27 federal and provincial budgets, alongside initiatives involving digital invoicing, documentation, data integration and technology-driven tax administration, show that digital transformation is already underway.

“PTBA emphasized that the success of this transformation will depend not only upon technology, but equally upon the institutional and human capacity required to understand, administer and implement it effectively,” the statement said.

PTBA called for coordinated capacity building involving tax authorities, taxpayers, tax professionals, lawyers and adjudicatory institutions.

How does PTBA want tax administration performance measured?

PTBA said tax administration should be judged on a broader set of indicators rather than revenue collection alone, including the quality of assessments, timely refunds, implementation of appellate orders, resolution of system problems and reductions in unnecessary disputes and compliance costs.

The association said improved taxpayer facilitation and voluntary compliance should also be considered when assessing administrative performance.

It argued that an efficient tax system should collect the correct amount of tax through predictable, transparent and effective administration while facilitating legitimate economic activity.

PTBA also said Pakistan should accelerate its transition toward a more documented and cashless economy while reducing distortions between documented and actual economic values.

The association said policy should encourage previously undocumented economic activity to enter the formal system while creating clearer distinctions between compliant and non-compliant businesses.

“The objective, the delegation stressed, should be to broaden the economic and tax base rather than disproportionately increasing the burden upon those already within the documented sector,” PTBA said.

How does PTBA want Pakistan to reduce the cost of doing business?

PTBA wants a stable and predictable tax framework that supports investment and competitiveness while still allowing the government to meet its revenue requirements. It raised concerns about the combined impact of taxation, withholding mechanisms, federal and provincial levies and compliance requirements on businesses.

The association argued that sustainable revenue growth ultimately depends on expanding economic activity, encouraging investment and enterprise, and broadening the tax base.

PTBA also called for stronger institutional mechanisms to identify recurring administrative problems and translate individual complaints into broader improvements.

It suggested that institutions such as the Federal Tax Ombudsman could play a greater role in identifying patterns of maladministration and providing structured feedback to improve tax administration, systems and taxpayer facilitation.

The association said individual disputes and complaints should, where appropriate, contribute to institutional learning and systemic improvements rather than resulting only in relief for individual taxpayers.

Dercon shared perspectives from international experience on economic reform, institutional capacity, digital transformation and implementation, according to PTBA.

The participants agreed on the value of continued engagement among policymakers, economists, tax professionals and other stakeholders to identify practical measures to support Pakistan’s economic development and improve its investment and business environment.