ISLAMABAD – Finance Minister Muhammad Aurangzeb has acknowledged that several firms are relocating out of Pakistan, citing high taxes and elevated energy costs as genuine challenges facing the economy.
The finance minister said tax policy has now been placed under the Ministry of Finance, while the Federal Board of Revenue’s (FBR) role is limited to tax collection. He said the transfer of tax policy from the FBR to the Finance Division was aimed at improving governance and efficiency.
He expressed these words while Aaddressing the Pakistan Policy Dialogue.
Muhammad Aurangzeb said Pakistan received $38 billion in remittances last year, while inflows are expected to rise to $41 billion during the current fiscal year.
Muhammad Aurangzeb said major reforms have been introduced in the tariff regime, stressing that increasing duties repeatedly is harmful to the economy. “We must acknowledge that high taxes and expensive energy are real issues. Duties need to be rationalised and the cost of doing business must be reduced,” he said.
The finance minister said non-banking individuals are being brought into the formal financial system, adding that tariff rationalisation is essential for shifting towards an export-led economy. He announced that by June this year, all government payments will be shifted to digital channels.
He said sustainable growth is only possible through economic reforms, adding that the government’s reform agenda aims to reduce the burden on the national exchequer and stabilise the economy.
Aurangzeb said lowering tariffs would help boost Pakistan’s exports and industrial output. “For the first time, duties on raw materials have been reduced under tariff reforms,” he said, adding that the ongoing economic measures could place Pakistan on an “East Asia-style growth trajectory.” He stressed that debt repayment did not decline on its own, but as a result of deliberate policy actions.
The finance minister further said local investors participated in the privatisation process of Pakistan International Airlines (PIA), while 24 institutions have been handed over to the Privatisation Commission. He revealed that state-owned enterprises incur losses of nearly Rs1,000 billion annually.
He added that the Utility Stores Corporation, PWD and PASCO have been shut down, saying corruption was involved in the subsidies allocated to these entities.
