Federal Minister for Finance and Revenue Muhammad Aurangzeb expressed optimism on Sunday Pakistan would secure a “larger and longer” bailout agreement in its negotiations with the International Monetary Fund (IMF) in July, following the approval of the $67.76 billion federal budget.
“I have already said we are moving in a positive way,” the finance minister said while discussing the fresh IMF program during a media interaction in the federal capital. “During July we should get into a good agreement.” “I am very optimistic that we will be able to take it through the finish line for an extended fund program, larger and longer in nature,” he added.
The finance minister reiterated that he viewed the program being funded and supported by the IMF as part of Pakistan’s own endeavor to strengthen itself economically. “We need the IMF because not only these IFIs [international financial institutions] but even our firendly nations want a backstop which is the fund program,” he continued. “What we have to do in the next three years to make sure this is the last program.”
He mentioned he had already been in virtual discussions with the IMF to move toward a staff-level agreement.
Aurangzeb said the basic framework, including the prior actions, had been formulated while the IMF delegation was in Pakistan, saying that the structural benchmarks of the program had been the same for the last three or four years while Pakistan had not implemented.
“Now we have told them to trust us and we will get this done,” he added.
Finance Minister Muhammad Aurangzeb also said that the government has decided to abolish the concept of ‘non-filers’.
The finance minister said he understood that the salaried class was particularly experiencing financial strain from new taxes. He pledged to offer relief to salaried individuals once any financial respite becomes feasible.
He also argued against the category of “non-filers,” expressing confidence that government initiatives will eventually make the categorisation obsolete. Highlighting key economic improvements, he stated that the country’s foreign exchange reserves stand at $9 billion, and inflation has reduced from 38% to 12%.
The repatriation of dividends to international companies, which is crucial for attracting foreign direct investment, is complete.
The FM revealed that the World Bank approved $1 billion for the Dasu project, and the International Finance Corporation (IFC) sanctioned $400 million for PTCL, to be received in the next fiscal year. The Federal Board of Revenue (FBR) achieved tax collections of Rs 9.3 trillion, reflecting 30% growth.
Emphasising macroeconomic stability, he noted the FBR’s complete digitisation, which will enhance efficiency and curb corruption through technological advancements.
Following this, Aurangzeb assured that all tax refunds up to June 30, 2024, amounting to over Rs 50 billion, would be disbursed within the next two to three days, along with the Duty Drawback of Local Taxes and Levies (DLTL) refunds. The FM mentioned that 42,000 retailers are now registered and will be taxed from July 1, reiterating his stance on eliminating the ‘non-filers’ concept.
Addressing the inflation-struck masses, the finance minister said, “I completely understand the stress that people from different sectors feel about additional taxes; I completely empathise and sympathise, but we need to work for it.” He emphasised the government’s commitment to reducing the burden on common people and businesses by curbing leakages and improving the management system. Announcing a new pension system for civil employees effective immediately, with the military to follow next year,