Islamabad, February 4, 2026 – The Government of Pakistan has announced December 2026 as the target date to implement major initiatives aimed at simplifying the country’s tax system.
As part of the plan, the government will publish a comprehensive tax simplification strategy by May 2026. The strategy will focus on reducing rate schedules, limiting special regimes, curbing excessive withholding and advance taxes, rationalizing tax exemptions, and scaling back rulemaking powers.
The Ministry of Finance (MoF) emphasized that the measures will harmonize federal and provincial taxes in consultation with the National Tax Council and aim for revenue neutrality in the medium term.
Key objectives of the tax simplification strategy include:
• Reducing tax rate schedules
• Cutting down special tax regimes
• Limiting excessive withholding and advance taxes
• Rationalizing and reducing tax exemptions
• Harmonizing federal and provincial taxes
• Publishing annual reports on implementation progress
The strategy will feature time-bound, monitorable actions over a 3-5 year period, with revised legislation and policy notifications made publicly available on the Tax Policy Office (TPO) and Ministry of Finance websites.
The government aims for lower compliance costs and reduced economic burden on businesses and individuals while ensuring a simpler, more transparent tax system.