Islamabad, Sep 29: Govt to Sign National Financial Pact, Involving Provinces in IMF Program Aurangzeb. Finance Minister Muhammad Aurangzeb announced that all provinces would be included in the new International Monetary Fund (IMF) bailout program if the federal government and provinces signed a National Financial Pact. By increasing tax collection, this agreement would bring the tax-to-GDP ratio up to 14%, which is more in line with the 18% observed in nearby nations.
The senator, following the distribution of the first tranche of the recently agreed $7 billion bailout from the IMF, gave a summary of the nation’s continued attempts to stabilize its economy during a press conference today.
Macroeconomic stability and structural reforms, according to Aurangzeb, are essential for improving the situation. He stated that although the Pakistan Stock Exchange was reaching all-time highs, the foreign exchange reserves currently covered two months’ worth of imports.
The Finance Minister praised the central bank’s decision to lower its key lending rate in response to a slowdown in inflation. He said that to demonstrate its strength at this period, the federal government turned down multiple bids for T-Bills and other instruments at auction.Aurangzeb underlined the present effort to right-size the government and eliminate 60% of open positions. He emphasized the necessity for structural reforms, notably in state-owned firms and the energy sector.
The minister of finance announced that anyone who did not file taxes would no longer be able to buy cars or real estate. She also acknowledged the difficulties with the current tax system. In order to combat an estimated Rs. 7 trillion in tax evasion, the Federal Board of Revenue (FBR) plans to hire 2,000 professionals and boost the number of tax audits. Additionally, efforts are being made to lower the Rs. 750 billion in smuggling losses that are now recorded.
The Finance Minister encouraged provinces to establish price control committees in order to guarantee that consumers profit from these advancements, as the rate of inflation is declining and fuel prices are reducing. In order to assure equity for all taxpayers, he continued, the administration has fully blocked all avenues for additional tax exemptions and will widen the tax base.
