Minister for Finance and Revenue, Senator Muhammad Aurangzeb said on Sunday that the measures introduced by the incumbent government have led to a significant improvement in the economy, which will be translated into sustainable growth and development.
Addressing a press conference, the minister said that macroeconomic indicators observed resilience during the fiscal year ending on June 30, 2024, adding it was a prerequisite for achieving sustainable economic growth and development as well as for social prosperity.
During the period under review, the minister said that the foreign exchange reserves of the country reached $9 billion, and the inflation rate came down from 38 per cent to 12 per cent, adding that by the end of May and the start of June 2024, all the backlog of international companies including their profit and dividends were cleared, which was a positive sign of the macro stability.
Regarding the international finance corporations, the minister said that the World Bank had approved $1 billion for the construction of the Dasu Dam project, adding that IFC also approved $400 million for PTCL in the context of acquisition financing, adding that it was another benefit of the macro stability.
The minister resolved to take the macro stability forward towards permanence to put the economy in the positive direction of fast-track economic development and progress. He said that it was also vital to encourage and attract local investment as well.
The minister expressed optimism that the Federal Board of Revenue would also achieve its revenue targets fixed for the current fiscal year as FBR collected Rs9.3 trillion revenues so far, adding that the revenue collection witnessed about 30 per cent growth on year on year basis.
Highlighting the salient features of the federal budget for the fiscal year 2024-25, the minister said that the government was determined to increase tax to GDP ratio up to 13 per cent during the next 3 years as the existing tax-to-GDP ratio standing at 9.5 per cent was not sustainable.
Besides the government has introduced reform measures for the energy, power and petroleum sectors, adding that the reforms in State Owned Enterprises were also at the top of the current government economic reforms agenda to achieve economic growth and social development.
Senator Muhammad Aurangzeb said that for the rationalization of the revenue targets set for the next fiscal year as well as to plug the leakages and theft, the government has decided on the end-to-end digitization of the FBR, which also aims to end human intervention.
The government also intended to introduce incentives and facilitation for enhancing tax compliance, adding that the filing process would be simplified further. He said that to this effect the government has also incorporated the suggestions and proposals of the chambers.
The Finance Minister said that the tax on industry and salaried class were increased but besides this, the government has taken practical steps to remove Rs3.9 trillion exemptions, bringing the real estate and retail sectors into the tax net, adding that efforts are afoot to bring more sectors into the tax net for reducing the tax burden on existing taxpayers.
By the last day over 42,000 retailers registered, he said adding that the tax would apply to them by July 1, 2024. He said that with the demand side, the supply side of the real estate was also brought into the tax net and the terminology of non-filers would also be removed.
Meanwhile, all the determined tax refunds by the June end would be paid during the next two to three days to facilitate the businesses, he said adding that under the special directives of the Prime Minister, the funds were allocated in the current budget for the payment of DLTL, which was pending for several years.
The minister cleared that there was no increase in the Petroleum Development Levy (PDL), adding that Rs70 was included as the ceiling. He mentioned that negotiations with the International Monetary Fund were progressing positively. He added that the government was striving to make this the last program with the fund
Replaying to a question, the minister said that the cut on PSDP was aimed at reducing the public expenditure, besides initiating the development projects in public-private partnership mode as it was already started by the Sindh Province.
To another question, the minister said that the government was aware that tax increases have enhanced the burden on the salaried class, adding that as the fiscal space available they would be compensated.
