ISLAMABAD: Finance Minister Mohammad Aurangzeb has said that the government gained some fiscal space through cutting down debt servicing by Rs1 trillion and improving tax revenues to improve public finance management.
While speaking at the Atlantic Council on the topic of Challenges and Opportunities for the Pakistani Economy through 2025 and Beyond, he said that the cash in circulation stood at Rs 9 trillion, but there are sectors which are not in the tax net, including wholesale, retail, real estate and agriculture. Now we will have to move towards them. Some cynics say that you are going to impose a tax on agricultural income, and now they say the same for other sectors. Through the National Tax Council, the enforcement and compliance will become effective on a short-term basis.
In a separate meeting, Aurangzeb briefed Assistant Secretary of the US Department of the Treasury Robert Kaproth on the macroeconomic indicators of the country. He highlighted the reforms being undertaken in taxation, energy, privatisation, SOEs, pensions and debt management. He also underlined the importance of the Country Partnership Framework (CPF) of the World Bank in dealing with existential challenges facing the country, including population and climate. The federal minister also held a luncheon meeting with American corporate leaders on the sidelines of the WB/IMF Spring Meetings.
The finance minister briefed the participants on the improving macroeconomic indicators and the reforms in taxation, energy, SOEs and privatisation. He also expressed the desire to continue collaboration with the US in the mines and minerals sector.
Aurangzeb held a very productive meeting with Ajay Banga, President World Bank Group. He thanked him for WB’s historical support to Pakistan and spearheading the conception and preparation of a decade-long Country Partnership Framework (CPF) with a sharp focus on impacts and outcomes. He appreciated WB’s continued support in developing a comprehensive implementation strategy and an action plan for the operationalisation of the CPF and improving the overall operational efficiency.
He also met with Martin Raiser, the World Bank’s Vice President for South Asia and underscored the need for accelerated operationalisation of the CPF and emphasised the timely identification of projects to be implemented in specific sectors. Both sides agreed on the importance of increased private sector investment to generate employment opportunities. The finance minister also highlighted the need to remove implementation bottlenecks and proposed establishing an escalation mechanism to expedite project execution.
The finance also met with the Deloitte delegation and apprised them of Pakistan’s macroeconomic outlook, the government’s sectoral development agenda, and its export-led growth priorities. Minister Aurangzeb also welcomed Deloitte’s planned visit to Pakistan in May 2025 to further deepen engagement.
Aurangzeb also participated in a panel discussion on “Revenue Mobilization in the Medium Term” organised by the IMF. Besides efforts for broadening the tax net, the finance minister mentioned efforts aimed at FBR transformation by reducing the interface between the taxpayer and tax collector and undertaking customised audits using AI.