LAHORE: Pakistan’s Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb said on Sunday that the government of Pakistan is taking tough decisions in the larger interest of the country’s economy and its people.
Addressing a Pre-Budget Conference FY 2024-25, the finance minister said, “We are doing all this not under the pressure of the IMF (International Monetary Fund) but for Pakistan because the country is supreme to all of us.” The conference, jointly organized by the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and Business Recorder, convened at a local hotel in Lahore, providing a platform for stakeholders to deliberate on key economic issues.
The finance minister underscored that the government’s decisions were not influenced by external pressures, including those from the International Monetary Fund (IMF), but were driven solely by the imperative of advancing Pakistan’s economic well-being. He emphasized the importance of restoring confidence in the business community, particularly in the tax revenue collection authorities, such as the Federal Board of Revenue (FBR), through institutional reforms and effective measures.
Highlighting priority sectors for financial support, Senator Aurangzeb identified agriculture, information technology (IT), and small and medium enterprises (SMEs) as focal areas. He stressed the key role of the private sector in navigating the country through economic challenges. He affirmed the government’s commitment to facilitating business endeavors while improving governance.
The Finance Minister advocated for a shift towards export-oriented industrial transformation, urging industries to reduce dependency on government subsidies. He assured comprehensive reforms in tax collection mechanisms, including efforts to expand the tax base through initiatives such as the tax registration campaign initiated in March.
Senator Aurangzeb outlined the government’s commitment to digitization as a means to enhance revenue generation and transparency in tax collection. He acknowledged challenges in the implementation of the track and trace system and highlighted ongoing efforts to address shortcomings.
In a positive assessment of economic indicators, the finance minister cited improvements in the current account deficit, exchange rate stability, inflation moderation, and record-high stock exchange performance over the past months. Responding to queries from the business community, he acknowledged the need for reforms in the tax-to-GDP ratio, energy sector, and privatization endeavors.
The Federal Finance Minister said that economic indicators have improved during the last seven to eight months, and at present, the current account deficit is less than one billion dollars, while the Pak rupee is also stable against the US dollar and inflation is coming down and the stock exchange is at an all-time high.
The Finance Minister reiterated calls for enhanced financial support to key sectors such as agriculture, IT, and SMEs, urging SMEs to improve documentation for better access to loans. He advocated for a reduction in interest rates in line with declining inflation rates.
As far as the privatization of various public sector enterprises is concerned, he said that the government is taking aboard local investors along with foreign investors, citing that foreign as well as local investors are involved in the privatization process of PIA.
Senator Muhammad Aurangzeb said that in a meeting with the CEO of commercial banks at the State Bank of Pakistan, he had urged the banks to make arrangements for enhancing the finances for agriculture, IT and SMEs sectors. He also appealed to the SMEs to improve their documentation so that the banks could easily evaluate them for loans/fiscal support. He said that the industry could not operate at an interest rate of 25 to 26 percent, asserting that when inflation has come down, then interest rates should also come down.
