FINANCE Minister Muhammad Aurangzeb, who is in Washington in connection with the IMF/World Bank autumn meetings, has aggressively been projecting the cause of Pakistan during his bilateral meetings with various officials of the two institutions, delegates and media-persons. He briefed them on different aspects of the ongoing reforms process and prospects for increased investment in various sectors of Pakistan’s economy, creating a favourable environment for the purpose.
Reports emanating from Washington bear testimony to the fact that the Minister went there after doing necessary home work and this has started paying dividends. He told Reuters that Pakistan is targeting around $1 billion in a formal request for funding from the International Monetary Fund (IMF) facility that helps manage external shocks. The IMF agreed to a bailout for Pakistan last month but has further funding available via its Resilience and Sustainability Trust (RST). The country is also in talks with the Asian Infrastructure Investment Bank for a credit enhancement for a planned Panda bond, with an initial issue of $200-250 million. Earlier, the Minister had stated that negotiations with China for debt rollover are progressing well. Delay in planned privatization of the PIA and Islamabad Airport was sending wrong signals but the Minister explained that it was because of two factors: ensuring macroeconomic stability and doing the proper due diligence of the interested parties. He expressed the confidence that the process will now be completed in a fair and transparent manner in November. There is also growing realization in Pakistan that the tax burden on the salaried class has reached to unbearable levels and in this backdrop the remarks of Aurangzeb augur well for this segment of the society as he acknowledged that their capacity to pay taxes has reached saturation point and now others will have to pay their share of taxes. Dismissing media reports that the government was not serious about broadening its tax base, he added that the tax take had risen by 29pc in the last fiscal year, which overlapped with a prior caretaker government, and was targeted to rise by a further 40pc in the current fiscal year. Hopefully, the goal of broadening the tax base will be realized by focusing on sectors like real estate, retail, retail distributors, and agriculture. The Government should also focus on creating a conducive environment for industry, IT and telecom and agriculture to grow as increased economic activity would mean more revenue for the national kitty.
