Working On Strategy To Carry Out Structural Reforms, Expand Tax Base: Finance Minister

KARACHI, (UrduPoint / Pakistan Point News – 29th Mar, 2024) Federal Minister for Finance and Revenue, Muhammad Aurangzeb, on Friday, said that Government is working on a two pronged implementation strategy to carry out structural reforms for enhancing Tax to GDP ratio.

The minister, while addressing Gong ceremony at Pakistan stock exchange in Karachi and later talking to media Persons said that in the first phase of the strategy short to medium term measures would be taken for “closing the gaps, stemming the leakages and the losses while the second one was introducing structural reforms in the medium to long term.”

He said that finance ministry was working with law ministry and FBR to remove leakage in tax revenue, execution of track and trace system and digitizing its operations to ensure transparency and operational efficiency for enhancing tax collections.

The minster informed that cases amounting to around Rs1.7 trillion were under litigation in tribunals and Government wanted that such cases be decided in the next three months. The law ministry and the attorney general for Pakistan were requested to play their role in the regard, he added.

Terming end-to-end digitalization of tax system as necessary for bringing transparency and confidence building of the tax payers, the minister said that bringing the under-taxed and non-taxed sectors into the fold and digitization will result into additional revenue generation.

Referring to FBR‘s digitalization, Aurangzeb said that the Request for Proposal (RFP) for a world class Consultant Having experience in emerging markets like Pakistan would be issued in the next month.

Highlighting improvement in economic sector the minister said that economic indicators have turned positive as Gross Domestic Product was showing recovery mainly due to 5% growth in Agriculture sector, stock market returned to profitability while headline inflation is gradually declining.

The growth momentum in Agriculture and livestock sectors is expected to be continued as estimates suggest a bumper wheat crop this season while improvement is also being anticipated in large scale manufacturing (LSM) and services sectors, he hoped.

Stand by arrangement with IMF finalized during previous regime of Prime Minister Shahbaz Sharif helped Government‘s efforts for economic stability while we are hopeful that staff level agreement would be reached out by the end of the fiscal year, he said.

On a query about Extended Fund Facility, the finance minister said that Pakistan was ready to initiate discussions with IMF for entering into “a larger and longer program”.

However there haven’t been any final discussions with the Fund yet and request to enter the EFF will be further formalized and details of the deal might be discussed during the spring meetings in Washington next month, Aurangzeb added.

Highlighting the role of private sector in economic development, he said the importance of capital market in promoting economic development is fundamental and the Governmentin coordination with the relevant departments as well as stakeholders, will further focus on capital market to enhance market efficiency, transparency and investor protection.

Aurangzeb urged the private sector to lead the economic recovery in the country while the Government will ensure policy framework and policy continuity.

Underscoring the significance of Chinese investment in Pakistan and partnership with local companies, the finance minister called for increasing cooperation between Pakistan Stock Exchange and Chinese stock exchanges as “it will not only help us here in Pakistan in deepening, widening the capital markets based here, but also in executing CPEC phase 2.”

The minister further informed the media persons that matters pertaining to privatization of PIA and outsourcing of airports had entered into advanced stages and we wanted to take it to the finish line by the end of the current financial year.