Finance and Revenue Minister Senator Muhammad Aurangzeb on Saturday reiterated the government’s commitment to achieve the ambitious revenue targets envisaged in the 25th Budget.
The tax target increase consists of a 48% increase in direct taxes and a 35% increase in indirect taxes from last fiscal year’s revised estimates. Non-tax revenues, including oil taxes, rose 64%.
“For the next financial year, we will definitely solve the problems brought by the budget for traders,” Aurangzeb said while addressing business leaders at the regional office of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) in Lahore.
Noting that the budget should be viewed from a broader perspective, the finance minister said the economy is moving towards macroeconomic stability.
The government on June 12 proposed $13 trillion in tax revenue, which will increase by about 40% from this year, starting July 1, to strengthen its case for a new bailout deal with the International Monetary Fund (IMF).
Amid calls to stop rising electricity prices, the finance minister stressed the need to regulate distribution companies (Disko); otherwise, electricity prices will increase as they have in recent times.
Aurangzeb emphasized the importance of domestic and foreign investment and emphasized the need for economic stability from a budgetary perspective. “Foreign investors are important for Pakistan and local investment,” the finance minister said.
He advocated sweeping reforms to shake the economy out of its current rut, and called for shutting down redundant federal government departments. “We have to close the ministry that was given to the province,” he said.
The king of finance said he did not understand the term “non-filter”. “It [Pakistan] is the only country in the world that doesn’t mince words.”
Touching on the economic policy, Aurangzeb expressed his views on gradually reducing the level of politics to encourage economic growth. “We need to increase the tax-to-GDP ratio to 30% in the next three years,” he said.
Aurangzeb pointed to the latest “economic milestone” achieved by the Pakistan Muslim League-Nawaz (PML-N) government, saying foreign exchange reserves have crossed $9 billion.
Aurangzeb, who had to plug the leaks that were prevalent in the system, said that the people’s complaints against the heavy handing given by bureaucrats and rulers were true.
“Criticism that the government has not reduced the allowances and benefits of senior officials is valid.”
In his speech, Aurangzeb stressed the importance of developing small and medium enterprises (SMEs) and the IT sector to enhance economic growth and stability in the country.
