Artificial intelligence to drive new tax model, says Aurangzeb

KARACHI: Finance Minister Muhammad Aurangzeb said on Tuesday that human intervention between the tax administration and taxpayers would be reduced to a minimum under a new AI-led engagement model.

Addressing a banking summit in Karachi, the minister said parliament had introduced a new tax administration operating model and approved a new structure in which notices would be issued through AI-led systems.

The minister discussed several segments of the economy and expressed optimism about the launch of international bonds.

He said that although Pakistan was late in entering the financial market of China, the world’s second-largest economy, the Panda Bond remained a significant achievement for the country.

Says Pakistan preparing to launch more Eurobonds, sukuk

Pakistan had been trying for years to tap the Chinese financial market but could not do so for several reasons. However, the government succeeded in entering the market to raise yuan equivalent to $250 million in mid-May 2026. The bond attracted demand more than five times its target.

The finance minister said Pakistan was preparing to launch more Eurobonds and sukuk in the international market. He said the upcoming instruments would be dollar-settled rupee-linked bonds, which would be a new experience for the country.

He said requests for proposals had been issued to international investors to assess market demand and pricing.

Mr Aurangzeb said Pakistan had re-entered the international bond market after four years and strong demand for Eurobonds had created space to increase the size of the issuance to $750m. He said strong investor demand would support the new bonds in the pipeline.

Speaking about the Pakistan Stock Exchange, he said activity drivers were more important than the PSX numbers. He said the number of investors had grown, Gen Z investors were also entering the market and corporate profitability had returned to double digits.

Referring to this year’s budget, the minister said the budget was led for the first time by the Tax Policy Office, which had been moved to the Finance Division.

“We focused on export-led growth, removing the advance tax, removing the super tax, low-cost subsidised financing and continuing with the tariff regime,” Mr Aurangzeb said, thanking the prime minister and the cabinet in this regard.

He said the banking industry would remain critical to Pakistan’s journey from stabilisation to sustainable growth. Increased lending to SMEs, exporters, agriculture, manufacturing, construction and IT sectors would be mission-critical, he said, adding that the country had moved in the right direction but still had a long way to go.

Pakistan Banks Association Chairman Zafar Masood told the summit that the banking industry had a dominant role in the economy as it paid more than Rs1tr in taxes annually to the government.

He said credit lending to agriculture had increased by 39 per cent within a year, while housing lending rose by 90pc. He said SMEs were also benefiting from banks, as lending growth had increased by 111pc and the amount provided to SMEs rose by 80pc per year.

Published in Dawn, July 8th, 2026 ...