Islamabad, February 25, 2026 – Prime Minister Muhammad Shehbaz Sharif on Wednesday underscored the urgent need to prioritize economic growth, industrial production, exports, and both local and foreign investment in the upcoming federal budget for 2026-27, while calling for a broad-based reduction in indirect taxes to ease the burden on consumers.
Addressing the inaugural session of the Pakistan Governance Forum 2026, the prime minister stressed the importance of expanding the tax base, noting that Pakistan’s tax-to-GDP ratio had improved to 10.5 percent due to ongoing reforms and enforcement measures. However, he expressed concern that a significant portion of indirect taxes collected from consumers was not being deposited into the national exchequer, terming it a major injustice to the public.
The premier recalled that in June 2023, Pakistan stood on the brink of economic default, but through collective efforts and decisive policy actions, the government successfully stabilized the macroeconomic situation within two years. He said inflation, which had surged to nearly 35 percent, had been brought down to below 7 percent, while the policy rate was reduced to 10.5 percent, creating space for economic recovery.
Highlighting key reforms, the prime minister said that power tariffs had been reduced by Rs9 per unit, while solar investments were safeguarded. He also pointed to decisive actions against power theft, which costs the national economy nearly Rs200 billion annually, and reiterated the government’s resolve to eliminate corruption-prone entities such as Utility Stores and the Pakistan Works Department (PWD).
Shehbaz Sharif emphasized that the government’s role was to facilitate the private sector, exporters, and investors rather than engage directly in business activities. He added that incentives were being offered to boost productivity, exports, and investment.
On social protection, he said the Rs38 billion Ramazan Package was being distributed to deserving families through digital wallets in a transparent and dignified manner.
The prime minister also highlighted the 34 percent growth in the IT sector, urging greater investment in youth skills, technical education, and emerging technologies, including artificial intelligence, to accelerate economic transformation.
Speaking on the occasion, Minister for Planning, Development and Special Initiatives Ahsan Iqbal said the forum aimed to generate actionable solutions through dialogue and collaboration. He stated that the Uraan Pakistan initiative would serve as a roadmap for sustainable development and governance reforms, expressing confidence that Pakistan could achieve a $1 trillion economy by 2035 through consistent policy implementation and national unity.