FBR Member Inland Revenue Operations Hamid Ateeq Sarwar indicated that although IMF conditions led to the removal of tax concessions for Tier-1 retailers, a lower tax rate could be considered with IMF approval if no input adjustments are claimed.

Aurangzeb emphasized the unsustainable nature of the current situation, where the formal sector subsidizes tax evaders, and stressed the need for compliance enforcement in agriculture, wholesale/retail, and real estate.

While acknowledging the failure of the Tajir Dost Scheme (TDS), FBR Member Legal Mir Badshah Wazir noted an increase in tax return filings from the retail sector due to new policy measures.

In a move towards modernization, State Bank of Pakistan Deputy Governor Saleem Ullah announced plans to fully implement Pakistan's digital payment system within five years.

The finance minister has reported significant improvements in Pakistan's economic outlook, highlighting a stable currency, increased foreign exchange reserves, reduced inflation, and a notable drop in KIBOR from 23% to 11%.

Despite the retail sector constituting 19% of GDP, it contributes only 1% in taxes, which indicates a flawed tax structure that needs urgent reform.

In response to weak revenue generation, the International Monetary Fund (IMF) has called for broad-based tax reforms in Pakistan, emphasizing the need for a more equitable tax system.

The IMF Resident Chief has pointed out that many sectors contribute minimally to national revenue, placing an unfair burden on compliant salaried individuals and businesses.

Currently, only 10% of the retail sector is taxed, leaving a staggering 90% undocumented, which hampers competition for compliant businesses.

To tackle the issue of undocumented businesses, the government plans to leverage artificial intelligence (AI) to enhance tax collection, targeting the Rs9.4 trillion in cash circulation outside the formal economy.

Foreign investor confidence appears to be returning, as evidenced by increasing capital inflows in both debt and equity markets.

Additionally, FBR Member Legal Mir Badshah Wazir reported that 12,249 Tier-1 retailers are now linked to the Point of Sale (POS) system, generating 660 million receipts in the last fiscal year.