FinMin acknowledges firm exits amidst high costs; highlights new investments

ISLAMABAD: Finance Minister Muhammad Aurangzeb acknowledged on Wednesday that several businesses are exiting Pakistan, citing high taxes and soaring energy costs as significant contributing factors. Despite this, he pointed to a promising influx of foreign investments, signaling optimism for the country’s economic future.

Addressing the Pakistan Policy Dialogue in Islamabad, Aurangzeb stressed that while the challenges facing the economy are undeniable, the government is actively working to address them. “It is true that some firms are leaving,” Aurangzeb admitted, referencing the impact of the nation’s elevated tax rates, energy expenses, and financing costs. “These are real issues, but we are aware of them and are taking steps toward resolving them,” he added.

While some companies are choosing to exit, the minister highlighted a contrasting trend: a number of foreign companies have recently entered the Pakistani market. Over the past 18 months, 20 new foreign investors have set up operations in the country, including major global names such as Google, Saudi Aramco, Wafi Energy, and Turkish Petroleum.

Aurangzeb remained optimistic about the broader economic landscape, pointing to the government’s ongoing reform efforts aimed at addressing these critical issues. “We are in the process of introducing structural reforms across various sectors, and a transformation of the Federal Board of Revenue (FBR) is already underway,” he said. These reforms, he explained, are designed to ease the burden on businesses and strengthen the country’s financial systems.

In addition to fiscal reforms, the minister underscored the importance of improving tax compliance and enforcement. “For tax laws to be effective, proper implementation is crucial. We are focusing on compliance and enforcement to ensure that the reforms are successful,” he said.

Despite the current economic pressures, the Finance Minister expressed confidence that these measures would pave the way for more sustainable growth and attract additional foreign investments in the long run.