FM clear on economic agenda

25 April 2024

Published in: Pakistan Observer

THE policy statement that Minister for Finance Muhammad Aurangzeb delivered in the National Assembly on Monday once again put across a clear message to all that the government is determined to go ahead with its agenda of reforms and economic stability and that the burden for this will have to be borne by affluent segments of the society. The Minister laid emphasis on creation of a tax culture, improvement in tax-to-GDP ratio but wanted no more burdens on the existing tax-payers, which has been the consistent demand of the people especially the corporate sector and fixed income groups. Aurangzeb made an impassioned appeal to Parliament to lend its support to the government for expanding the tax net and energy equation.

Ever since he assumed the charge of the Ministry, the new Finance Minister is devoting his time and energy to address the economic malaise and bring the economy back on track. In this connection, he has been holding intensive dialogue and consultations not only with internal stakeholders and people representing different walks of life but also leadership and delegations of multilateral institutions. However, it is quite obvious that a national consensus is required to address the economic challenges in the given political environment and the emerging regional and global economic scenarios. Therefore, the Minister has rightly urged the parliamentarians to extend a helping hand to the government in its endeavours to increase the tax revenue, which is the only viable option to enable the country to stand on its own feet financially and economically. It is a sorry state of affairs that in Pakistan the tax-to-GDP ratio still hovers around nine percent despite tall claims made by the successive governments and initiation of measures that made lives of the people miserable. This is not acceptable as the global average of tax-to-GDP ratio is 15% and in the case of OECD countries this reaches to an impressive 32%. Enthusiastic cooperation of parliamentarians is of paramount importance as generally they have been in the habit of shielding vested interests on different pretexts. People have heaved a sigh of relief as the Finance Minister is committing not to burden the existing tax-payers but realization of this pledge seems to be a difficult proposition as the business community is resisting attempts of the government to levy even a modest tax on them. Reports so far indicate a majority of the businessmen are not registering themselves voluntarily with the FBR and it is to be seen what the authorities concerned would do to implement the judicious plan to make those pay who otherwise earn significant to huge profits. One must believe the Finance Minister when he talks about a lot of support for Pakistan inside and outside the country and that there was a feeling the country should come out of problems. The Minister and his delegation held over one hundred bilateral meetings with senior leaders of multilateral institutions, global companies and delegates of other countries and his assessment must be based on the response he received from his interlocutors. However, all this depends on the success of the ongoing process of reforms and, therefore, it is incumbent upon the parliament as well as various sections of the society to extend their cooperation for this difficult but unavoidable process. No one would differ from the Minister when he speaks in terms of promoting agriculture growth and exploiting the huge potential of the IT sector. We have been hearing this for long but so far we have not been able to harness their potential due to conflicting approaches of the successive governments. The kind of challenges facing the agriculture sector can be gauged by the fact that the farming community has successfully produced a bumper crop but the system failed to provide them even the official support price. There are also issues that need urgent attention of the government like unending increase in the cost of inputs and inadequacy of storage facilities leading to wastage of the grain.