ISLAMABAD:- The government said on Tuesday that work is underway on pension and pension reforms that will apply to all agencies, indicating Islamabad’s desire to reduce government spending to control the budget deficit.
Addressing a press conference after the federal cabinet meeting, Law Minister Azam Nazeer Tarar said that Pakistan has too many government employees and the country is unable to meet the current expenses.
The minister said that the government will not do anything controversial, taking into account all stakeholders in pension and pension reform, including the judiciary and the military.
Finance Minister Muhammad Aurangzeb said he could not move forward with a tax-to-GDP ratio of 9 percent, saying other countries have a smaller proportion of taxpayers than Pakistan, which has a larger proportion of taxpayers. net tax.
“You can run educational institutions and hospitals with charity, but not the state,” he said, reminding the rich that they spend money on charity but don’t pay taxes.
Aurangzeb said the burden on existing taxpayers such as wage earners cannot continue as there is a need to expand the tax base and raise the tax-to-GDP ratio to 15 in the next three to four years.
The first phase of merchant registration is voluntary, with the government likely to take drastic action soon to bring the lucrative retail sector under the tax net.
The finance minister also said that interest rates will continue to fall in the coming months as inflation continues to fall – the benchmark consumer price index (CPI) for April fell to 17.3 percent, the lowest since May 2022.
Pakistan’s economy has been crippled by high business costs for years, Aurangzeb said, adding that he would boost economic activity in the country by encouraging private sector investment.
At the same time, Aurangzeb also pointed to the strong rupee, which indicates increased investor confidence and improved economic stability.
With the finance minister assuring reporters that rates will be cut in June, July and August, all eyes will now turn to the Monetary Policy Committee of the State Bank of Pakistan, which is scheduled to meet on June 22.
Pakistani stocks have risen since the release of the latest CPI figures, marking the fourth consecutive month of declines, and the latest indications will help the market further.
