Muhammad Aurangzeb, the Finance Minister of Pakistan, has publicly acknowledged the challenges faced by the public in light of the new taxes introduced in the recent budget. This acknowledgement follows widespread criticism of the revenue-raising measures proposed in the budget.
The President of Pakistan, Asif Ali Zardari, has given his approval to the tax-heavy Finance Bill 2024 upon the recommendation of the Prime Minister, in accordance with Article 75 of the Constitution. The bill is scheduled to come into effect on July 1, as announced by the President’s Secretariat.
Despite some amendments, the National Assembly passed the budget as a bill while maintaining the target gross revenue receipts of Rs 17,815 billion, which includes Rs 12,970 billion in tax revenues and Rs 4,845 billion in non-tax revenue.
In a press conference, Minister Aurangzeb openly acknowledged the financial strain experienced by the salaried class as a result of the new taxes. He further pledged to provide relief to salaried individuals as soon as possible. Minister Aurangzeb expressed sympathy and understanding for the stress felt by individuals in various sectors, while also stressing the importance of collective effort.
The Minister defended the government’s policy on the category of “non-filers” and conveyed confidence in the initiatives being taken to render this category obsolete. Moreover, he emphasized the need to eliminate IMF programs in the future, even if it entails pressure from the new taxes.
Minister Aurangzeb also disclosed that discussions with the IMF had taken place regarding the budget, underscoring the requirement for a new IMF program. He stressed the anticipation of pivotal long-term programs and agreements with the IMF in July.
Furthermore, the Minister revealed that the government plans to transition from the Public Sector Development Program (PSDP) to Public Private Partnership, a transition already initiated in the Sindh province. He also emphasized the inclusion of the construction sector in the tax net.
Regarding economic stability, the Minister asserted a decrease in the inflation rate from 38 to 13 percent. He expressed positivity about reinstating confidence from foreign investors in the country by implementing measures aimed at achieving economic stability.
Aurangzeb reiterated the government’s focus on increasing the tax-to-GDP ratio to 13 percent over the next three years. He also highlighted the importance of implementing reforms in the energy sector, combating theft and leakages, and digitizing the Federal Bureau of Revenue (FBR) to tackle corruption.
The Minister proudly announced Pakistan’s foreign exchange reserves of $9 billion and revealed financial approvals from the World Bank and the International Finance Corporation (IFC) for key projects in the country.
Finally, Aurangzeb mentioned that government ministers have voluntarily declined to receive salaries while personally paying their utility bills, as a symbolic gesture of solidarity with the public.
In conclusion, it is evident that the Pakistani government is facing scrutiny over new tax measures, however, the Finance Minister’s acknowledgment of public concerns and the government’s strategies for economic stability and reform offer valuable insights into the country’s fiscal direction.