Real estate, farm, wholesale sectors will also be taxed: minister

ISLAMABAD: Minister for Finance Mohammad Aurangzeb Sunday said all the promises made with the IMF were transparent and there was nothing secret which came under discussion with the Fund’s team that visited Pakistan last week.

In a televised speech, he said, “All the promises made with the IMF on account of quantitative and qualitative targets are transparent and placed on the Fund’s website. This is Pakistan’s program which is held, supported, assisted and funded by the IMF.”

He said the IMF team discussed public finance and taxation, energy and SOEs reforms.

“There is no surprise in it and I welcome this visit of the IMF because of the ongoing dialogue, as mutual trust develops through dialogue,” he maintained.

The National Fiscal Pact, he said, was a structural benchmark which got implemented by the end of September 2024.

He said the government had shared the right-sizing of the government plan with the IMF and its objective was to improve the public finance.

Aurangzeb said the Agriculture Income Tax (AIT) was pursued and he was thankful to all the four chief ministers for moving this agenda forward.

Pakistan has again requested the IMF for climate financing, he said, adding that the ADB had already disbursed $500 million loan for climate resilience.

On taxation, the finance minister said he was firm that they would go for compliance and enforcement, adding that the salaried class and manufacturing sector could not be taxed more for revenue generation. “All other sectors will have to play their role; we all have to contribute including real estate, wholesalers and agri income tax. It is not a request, but we will have to do it because as a country our hands have been forced. I have made it clear and I want complete clarity on this issue,” he emphasized.

“It’s not only the charter of economy but also the charter of environment that needs to be pursued,” he said. “These are the things on which the country has to stand united,” he maintained.

Talking about the increasing population growth, he said it could not be sustained at the existing pace. Poverty, he said, was another monster confronting the country.

“Climate emergency and air pollution are the issues before us. The charter of economy and charter of environment need to be tackled simultaneously because these are the important issues that came under discussion with the IMF.”

Aurangzeb said he held meetings with the multilateral banks and counterparts of different countries on the sidelines of IMF/World Bank annual meeting in Washington, D.C. He also held meetings with credit rating agencies.

The minister said he would continue giving full credit to the caretaker setup, as they pursued for 9-months with vigour the IMF program under the Standby Arrangement (SBA), helping the country achieve an economic turnaround.

He said inflation had come down from 38 percent to 7 percent, while the foreign exchange reserves had increased, sufficing two and a half month’s imports.

The twin deficit, he said, had turned into surpluses and multilateral and bilateral partners had praised Pakistan for achieving the economic turnaround in a short span of 14 months. “No room for complacency and stay on course was the message received from the multilateral and bilateral partners,” he said, adding that macroeconomic stability would be further consolidated.

He said Prime Minister Shehbaz Sharif would soon unveil the home-grown agenda of growth and prosperity. Aurangzeb said they had accomplished work on right-sizing of 11 ministries and would share its details as well as the pension reforms soon.