Govt to shift tax burden from salaried class to undocumented sectors

May 27, 2025 (MLN): The government is committed to shifting the tax burden away from the already compliant formal sector and salaried class towards segments of the economy that have so far remained undocumented or under-taxed.

This commitment was discussed during a meeting between the Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, and a delegation of the All Pakistan Ceramic Tiles Manufacturers Association (APCTMA), led by Abdul Rehman Talat, Executive Director of Orient Ceramica, at the Finance Division.

The delegation shared a detailed industry brief, noting that the current installed tile manufacturing capacity in Pakistan stands at approximately 560,000 square meters per day.

This capacity is backed by over Rs100 billion in investments, nearly 60% of which is foreign direct investment from China, as per the press release issued today.

The industry, they added, has made remarkable strides in localization, reducing its import dependency from 74% to just 4%, and now relying almost entirely on local raw materials and labour.

They expressed confidence in bringing this figure down to 1% in the near future, making ceramic manufacturing a leading example of indigenous industrial capability.

The Finance Minister appreciated the sector’s localization efforts and acknowledged its contribution to import substitution, employment, and domestic value chains.

He shared his observations from a recent visit to ceramic units in Gujranwala, where he witnessed firsthand the high-quality production and advanced technology being employed by local manufacturers.

“Industries like ceramics demonstrate that with the right policy support, Pakistani manufacturing can match international standards,” the Minister stated.

Discussions also covered key reform areas, including energy sector reforms and the government’s efforts in improving the ease of doing business.

The Finance Minister assured the delegation that reforms in the energy sector are a top policy priority.

He added that the government is working on a series of measures aimed at improving affordability, ensuring reliability, and moving towards a more efficient and targeted energy pricing structure.

On ease of doing business, he reaffirmed that the government is actively engaging with stakeholders to simplify regulatory procedures, reduce compliance burden, and create a stable and predictable policy environment to attract further investment.

The Finance Minister further emphasised that broadening the tax base is essential to achieving fiscal balance and promoting fairness in the economy.

In this regard, he noted that the Prime Minister is personally leading high-level meetings to drive forward reforms that enhance transparency, documentation, and economic equity across all sectors.

The APCTMA delegation appreciated the government’s inclusive approach and reaffirmed their commitment to supporting policies that strengthen Pakistan’s industrial competitiveness and economic resilience.

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