ISLAMABAD: The International Monetary Fund (IMF) has called for Pakistan`s fiscal policy to go beyond achieving primary balance targets and protecting debt sustainability by reinforcing policy credibility, fostering economic recovery and creating space for public investment and social spending to support stronger longterm growth.

Speaking at a workshop on `Reforms for a Modern and Growth-Friendly Tax System in Pakistan`, IMF Middle East and Central Asia Department Director Jihad Azour said tax reform was critical to Pakistan`s economic growth agenda and remained central to the objectives of the Extended Fund Facility (EFF).

The workshop was organised by the Ministry of Finance and Revenue in collaboration with the IMF. Finance Minister Muhammad Aurangzeb also spoke at the workshop, highlighting achievements over the past two years.

Mr Azour said Pakistan had made important progress towards restoring macroeconomic stability, rebuilding confidence, strengthening external buffers and supporting a gradual economic recovery despite an era of shocks and uncertainty.

The IMF official said Pakistan`s recent stabilisation gains had created an opportunity that needed to be strength-ened through transformative reforms, with tax reform at the heart of the process. `A stronger, broader, fairer and more predictable tax system can support fiscal sustainability while reducing distortions that hold back investment, productivity, growth and formal job creation,` he remarked.

He said broadening the tax base, strengthening revenue administration, reducing tax expenditures, protecting priority spending and improving public service provision were Pakistan`s priorities.

He credited Pakistan for the progress made.

However, he said the next milestone was to turn stabilisation into stronger and more durable growth by moving beyond cycles of adjustment towards a more competitive, investment-friendly and inclusive economy.

Mr Azour said the IMF remained committed to supporting the authorities in building an economy capable of delivering higher productivity, led by a stronger private sector, and creating better opportunities for younger generations.

He warned that the highly uncertain external environment had made these objectives more urgent. Fiscal policy, he said, must do more than achieve primary balance targets and protect debt sustainability. It must reinforce policy credibility, foster recovery and create space for public investment andsocialspendingneeded to support long-term growth and public welfare.

Outlining four themes for discussion during the two-day workshop, Mr Azour identified credibility, growth, fairness and implementation as central to the reform process.ened through transformative reforms, with tax reform at the heart of the process. `A stronger, broader, fairer and more predictable tax system can support fiscal sustainability while reducing distortions that hold back investment, productivity, growth and formal job creation,` he remarked.

He said broadening the tax base, strengthening revenue administration, reducing tax expenditures, protecting priority spending and improving public service provision were Pakistan`s priorities.

He credited Pakistan for the progress made.

However, he said the next milestone was to turn stabilisation into stronger and more durable growth by moving beyond cycles of adjustment towards a more competitive, investment-friendly and inclusive economy.

Mr Azour said the IMF remained committed to supporting the authorities in building an economy capable of delivering higher productivity, led by a stronger private sector, and creating better opportunities for younger generations.

He warned that the highly uncertain external environment had made these objectives more urgent. Fiscal policy, he said, must do more than achieve primary balance targets and protect debt sustainability. It must reinforce policy credibility, foster recovery and create space for public investment andsocialspendingneeded to support long-term growth and public welfare.

Outlining four themes for discussion during the two-day workshop, Mr Azour identified credibility, growth, fairness and implementation as central to the reform process.