Finance Minister Muhammad Aurangzeb has stated that no mini-budget will be introduced, and there is room for reducing interest rates. The Pakistani currency will remain stable, taxes will be applied to retailers, and non-filers will face stricter penalties, prompting them to reconsider staying out of the tax net.
The finance minister assured that no mini-budget is forthcoming, and the tax exemptions provided on items like charitable hospitals, books, medical equipment, and fertilizers will continue.
Regarding the State Bank's monetary policy, he acknowledged that high-interest rates increase debt but expressed his opinion that there is room to reduce interest rates.
He emphasized that the IMF program is essential for economic stability and expressed hope that a staff-level agreement with the IMF will be reached this month.
He remarked that when dollar reserves are depleted, turning to the IMF program becomes necessary.
The finance minister stressed the need for consistency in macroeconomic stability, hence the requirement for the IMF program, and hopes to finalize staff-level agreements with the IMF this month.
Muhammad Aurangzeb claimed that the Pakistani currency will remain stable, regardless of the IMF's involvement. He highlighted IT and agriculture as growth sectors, noting their strong performance in the last fiscal year and expecting even better results in the future.
He mentioned that the World Bank has approved $1 billion. Understanding the IMF program is crucial, and it should be seen as Pakistan's program. Without fundamental infrastructure reforms, issues will worsen, and there are gaps in policy and enforcement.
The finance minister stated that a tax-to-GDP ratio of 9.5% is insufficient to run the country; the target is to increase it to 13%.
He acknowledged that structural reforms are challenging, especially removing political authorities from distribution companies.
He noted that people prefer to give money abroad but avoid dealing with the FBR, and there have been ongoing leakages for years. The government is moving towards digitization.
The issue of non-filers is significant, and the penalties for non-filers have been made severe enough to make them reconsider not joining the tax net.
The finance minister assured that sales refunds for the end of June will be cleared soon.
He shared his experience, stating that for six years, he was part of the salaried class and was the highest taxpayer in the banking sector.
Discussing development projects, he mentioned that 81% of the PSDP is allocated for ongoing projects, while 19% is for new projects.
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