Finance minister defends budget, optimistic on IMF deal

ISLAMABAD: Federal Finance Minister Mohammad Aurangzeb has announced that Pakistan’s economy is moving towards stability. He said that inflation has decreased from 38 per cent to 12 per cent. He added that discussions about foreign direct investments (FDI) in the country are ongoing, and the country’s foreign exchange reserves stand at $9 billion.

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Aurangzeb made these remarks while addressing the media after President Asif Ali Zardari signed the Finance Bill 2024, effectively implementing Budget FY 2024-25. The finance minister highlighted the government’s focus on macro stability, noting that various measures have improved the economy.

He said that confidence of foreign institutions has been restored with the return of economic stability. The country’s economy is on a path towards development, and the World Bank has approved $1 billion for the Daso project.

The Federal Board of Revenue (FBR) has demonstrated that 30 per cent growth is achievable, according to the finance minister, who also emphasised the importance of planned reforms in the energy and petroleum sectors. Aurangzeb also discussed the process of tax return submission, which will be streamlined to increase the number of taxpayers.

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Retailers will be taxed starting in July, with 42,000 already registered. He mentioned that federal debt payments and provincial finances operate under the Finance Ministry’s oversight.

Tax refunds to exporters will be cleared in the next 2-3 days, the finance minister said, adding that he will also expedite work on the second phase of the China-Pakistan Economic Corridor (CPEC).

A new pension scheme will be implemented from tomorrow (July 1), informed Aurangzeb, adding that the pension issues will be addressed legally.

He acknowledged the necessity of the IMF programme and indicated progress in negotiations. Aurangzeb stressed the need to stop tax evasion and expressed confidence that this will be the last programme with the International Monetary Fund (IMF).

The Petroleum Development Levy will not increase, and relief will be provided to the salaried class when feasible, he said.

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Aurangzeb recognised the increased burden on the salaried class and suggested adopting public-private partnerships similar to Sindh’s model. He reported that Rs 2,700 billion are stuck due to tax cases and that the Prime Minister has suggested shutting down some ministries. The finance minister believes that the proposed measures in the budget will help in putting the country’s economy on the right path.