Finance Minister Muhammad Aurangzeb announced on Saturday that the government is intensifying efforts to overhaul Pakistan's financial system through fundamental tax reforms, enhanced efficiency at the Federal Board of Revenue (FBR), and a rapid shift toward a cashless economy. Speaking at a certificate distribution ceremony for the FBR's Postgraduate Diploma Programme at Lahore University of Management Sciences (LUMS), he outlined a vision centered on public convenience, taxpayer trust, and transparency as the foundation for sustainable economic growth. Main Developments Aurangzeb stated that the government is working in a coordinated manner to improve both tax policy and tax administration. A new model is being introduced within the FBR that aims to significantly boost transparency and institutional efficiency. The finance minister highlighted that major cases of sales tax evasion have been detected, leading to increased tax collections that have benefited the national exchequer. He emphasized that modern digital systems and integrated data are now the backbone of effective tax administration. Read also: Why Pakistan's MSMEs Are Central to Economic Revival Prime Minister Shehbaz Sharif is personally focusing on FBR reforms and promoting a cashless economy, according to Aurangzeb. The objective is to document the economy, expand the tax net, and promote financial transparency. FBR Chairman Muhammad Rashid Langrial told the gathering that enhancing the professional skills of FBR officers and training them in line with modern requirements is essential for establishing an effective tax system. He said the tax system is being made more effective, modern, and transparent. Background The FBR has long faced criticism over low tax-to-GDP ratios, widespread evasion, and a complex tax structure that discourages compliance. Successive governments have attempted reforms, but progress has been slow, with the informal economy remaining a significant challenge. The Postgraduate Diploma Programme at LUMS is part of a capacity-building initiative aimed at equipping FBR officers with modern skills. The ceremony on July 25 marked the completion of the latest cohort of the program. Why It Matters A documented economy with a broader tax base is critical for Pakistan to reduce its fiscal deficit, fund public services, and attract foreign investment. The push for a cashless economy also aims to curb corruption and improve the ease of doing business. If successful, the reforms could restore public confidence in the tax system and create a more predictable environment for businesses. However, implementation challenges, including resistance to change within the bureaucracy and the need for widespread digital infrastructure, remain significant hurdles. What's Next The government is expected to continue rolling out digital systems and AI tools across the FBR to strengthen tax administration. Further cases of sales tax evasion are likely to be pursued as part of the crackdown. FBR officers are being urged to stay updated with changing technology, particularly artificial intelligence, to bring institutional performance in line with world standards. The broader cashless economy drive will require coordination with banks, fintech companies, and regulators to expand digital payment infrastructure nationwide.