Finance Minister Muhammad Aurangzeb on Thursday said that Pakistan would strike a deal with the International Monetary Fund this month, expressing optimism about the positive progress in talks between Islamabad and the global lender to reach a staff-level agreement on a new bailout programme.
The government is looking to clinch the IMF agreement on a bailout of more than $6 billion after addressing all of the lender’s requirements in its annual budget.
“The talks with the IMF are progressing positively,” the finance czar said while briefing the National Assembly’s Standing Committee on Finance. Aurangzeb informed the body that no country could run on a 9% tax-to-gross domestic product ratio and pledged to raise the ratio to 13%.
“The Fund requires taxation on the actual income which is fair,” the minister said.
The minister expressed hope to bring all the sectors into the tax net, saying that everyone will be made a filer as per Prime Minister Shehbaz Sharif’s directives.
Taxes had to be jacked up because the tax net was not wide, he added.
He further stated that there was a need to reduce human interference in the Federal Board of Revenue system, adding that the government will work on increasing people’s trust in the FBR.
Aurangzeb went on to say that loan and interest repayment had a major share in the government’s expenses.
He further stated that five federal ministries would be abolished, as announced by PM Shehbaz Sharif following the budget 2024-25 presentation last month and added that the decision in this regard will be made by July 30.
While addressing the standing committee, the minister said all the economic indicators remained positive during the last fiscal year, while the foreign exchange reserves remained well above $9 billion.
Moreover, the inflation rate saw a gradual decline during the last fiscal year, he added.
The finance czar stated that the Pakistani currency destabilised due to a delay in the IMF programme in 2023.
Aurangzeb further stated that some changes were being made in the service structure of the military, saying that the military’s entire service structure needed amendments.
He said that a system of contributory pension for the armed forces of Pakistan will be launched.
He said that the system has been notified for the civil servicemen from July 1, 2024; however, new pension scheme for the military servicemen will be applicable from July 1, 2025, he added.
“Those joining service from July 1 will receive their pensions under the new scheme,” he added.
