We have to start showing, start delivering, in the next two to three months: Aurangzeb
\n ISLAMABAD
\nMinister for Finance Muhammad Aurangzeb warned on Sunday that Pakistan will continue to seek International Monetary Fund (IMF) bailouts if it fails to boost tax revenue.
\nThe finance minister said that he was \u201crelatively confident\u201d of reaching a staff-level agreement with the global lender this month for an estimated loan of $6-$8 billion.
\n\u201cBut it will not be our last fund programme if we don\u2019t bring our tax revenues up,\u201d said the finance minister while speaking during an interview with Financial Times.
\nThe federal government presented the tax-loaded Rs18.877 trillion budget for the fiscal year 2024-25 (FY25) last month, aimed at shoring up public revenue and satisfying the IMF, which has repeatedly demanded improved tax collection.
\nThe budget aims to raise Rs13 trillion by next July, a roughly 40% increase from the current financial year, to bring down a ruinous debt burden that has caused 57% of government revenue to be swallowed by interest payments.
\nThe tax rises will mostly fall on salaried workers, who comprise a relatively small part of Pakistan\u2019s mostly informal economy, as well as some retail and export businesses. The budget also threatened punitive measures for tax avoiders, including restrictions on mobile phones, gas and electricity access and the ability to fly abroad.
\n\u201cWe do not have five years for our programme,\u201d Aurangzeb warned in the wake of a budget that seeks to reset the country\u2019s ailing economy. \u201cWe have to start showing, start delivering, in the next two to three months,\u201d he said.
\n\u201cThe direction of travel is positive, and investors are showing confidence in the stock market,\u201d said Aurangzeb, referring to the KSE-100 index, which is one of Asia\u2019s best-performing year to date. Still, the government faces a considerable challenge in putting Pakistan on the path for longer-term growth and debt sustainability, he said.
\nPakistan\u2019s debt has soared since the mid-2000s, as authorities failed to invest a gusher of loans from international bondholders and countries including China and Gulf nations into productive, export-oriented sectors. Instead, the country remains reliant on imports, forcing Islamabad to borrow to pay off existing and accumulating debts, Aurangzeb said.
\n\u201cWe need to create the capacity to repay loans,\u201d the finance minister said. \u201cAs long as this economy stays import-based, what happens is the moment it heats up, \u201cwe run out of dollars [and] we have to go back to the lender of last resort on our knees.\u201d
\nPrime Minister Shehbaz Sharif has travelled recently to Saudi Arabia, the United Arab Emirates and China to solicit investments on top of the IMF programme, which would be Pakistan\u2019s 24th with the multilateral lender.
\n\u201cIt\u2019s about time we get real,\u201d the finance minister said, pointing to Gulf investors\u2019 demands of equity and board seats. \u201cThe ball is in our court to provide bankable, investable projects.\u201d
\nHe also slammed a reputation for corruption at the Federal Board of Revenue. \u201cPeople don\u2019t want to deal with the tax authority because of corruption, because of harassment, because of people asking for speed money, facilitation money,\u201d Aurangzeb said. \u201cThat\u2019s not sustainable.\u201d
\n\u201cI empathise with the pain people will feel, I was one of the highest taxpayers, at least in the banking sector,\u201d he added.<\/p>\n","protected":false},"excerpt":{"rendered":"
We have to start showing, start delivering, in the next two to three months: Aurangzeb ISLAMABAD Minister for Finance Muhammad Aurangzeb warned on Sunday that Pakistan will continue to seek International Monetary Fund (IMF) bailouts if it fails to boost tax revenue. The finance minister said that he was \u201crelatively confident\u201d of reaching a staff-level […]<\/p>\n","protected":false},"author":2,"featured_media":417135,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-417193","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business"],"yoast_head":"\n