Pakistan to use AI for tax collection

Finance Minister Muhammad Aurangzeb on Thursday announced that artificial intelligence (AI) will be used to increase tax collection, highlighting concerns over Pakistan’s unequal tax burden.

Addressing the “Retail Reimagined: Innovate, Collaborate and Thrive” conference organized by the Pakistan Retail Business Council (PRBC), he pointed out that despite contributing 19 percent to the GDP, the retail sector pays only 1 percent tax.

He stressed that manufacturing, services and salaried workers bear an unsustainable tax burden and called for including agriculture, real estate, retail and wholesale sectors in the tax net.

He acknowledged the efforts of provincial governments to levy agricultural taxes and stressed the need for businesses to formalize and pay their fair share. “For the national interest, we cannot allow any more free riders,” he said, stressing the importance of documentation.

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Later, addressing the media, he confirmed the role of AI in improving tax collection. He noted that Rs9.4 trillion in cash is outside the formal economy and stressed the government’s commitment to integrate it over time.

Aurangzeb highlighted the economic improvements, citing currency stability, increasing foreign exchange reserves, declining inflation and a reduction in the GDP from 23% to 11%.

These factors have attracted renewed interest from foreign investors in Pakistan’s economic potential.

Pakistan is also working with international rating agencies to upgrade its credit rating to the “single B” category, which will boost investor confidence and restore access to global financial markets.