The Minister of Finance, Muhammad Aurengzeb, is currently aimed at a press conference after the budget to expand the federal budget proposed for the next fiscal year, after journalists organized a strike.
According to a Dawn.com Correspondent, the reporters expressed their concerns about not receiving a technical session yesterday by the Federal Income Board (FRB) on the Finance Law 2025, which details the legislation for the measures proposed under the budget.
Subsequently, they left the conference room in protest.
However, flanked by the president of FBB Rashid Mahmood Langial and the Secretary of Finance Imdadullah Bosal, Aurengzeb soon continued with his press conference in the presence of some journalists.
He reiterated the importance of tariff reforms under national tariff policy. “People ask us that income will decrease, but we have to take this country to an export -led discussion […] I want to go into the details of the steps we have taken. ”
The minister said that additional customs duties were eliminated in four “lines”, while they were reduced in 2,700 tariff lines, which were “directly related to these raw materials on the basis of which exporters will benefit.” He stressed that these steps were only for next year and more measures will be taken.
Echoing his comments yesterday, Aurengzeb emphasized that the Government tried to give relief “as much as possible” while considering the fiscal space. He also pointed out the 0.5pc reduction in the super taxes for the corporate sector.
Detailing the proposed measures for buyers and property sellers, he said: “The sale of the side still obtains capital profits, but the purchase side should obtain some relief.”
The minister also described the mortgage financing “as important as the fiscal side of things and what we have to do on the fiscal side.”
Speaking about the agricultural sector, Aurengzeb said that an additional tax on fertilizers and pesticides was a “reference point”, but negotiated with the International Monetary Fund (IMF) on the instructions of Prime Minister Shehbaz Sharif that was a “critical contribution in agriculture” and should not be imposed.
“Again, this is a step in the right direction,” said the minister.
Aurengzeb acknowledged that there were also talk of taxes and additional measures last year. “We had to impose them as when we were talking with international institutions, they did not agree with our position that there may be compliance in this country,” he said.
Expressing the objective of achieving a 10.9PC GDP imposed relationship for next year, the minister said that additional taxes were around RS312M of the total objective of 2.2tr. “We have two ways: either we ensure the application or present additional measures of up to RS 400 to 500 billion. That is why we will go to Parliament to help us with the amendments and enabling legislation.”
The minister added: “We have laws, legislation and taxes, but we could not enforce it, so in this fiscal year, we have worked on the application, which has exceeded 400 billion of 400 billion.”
Responding to a consultation, Aurengzeb stressed the need to reduce the role of the intermediary in the agricultural sector and increase the financing of small farmers. “It is very critical […] that we have a policy in delegated subjects. “
He pointed out that the relevant measures were underway, therefore, the growth target was decided considering that.
In wages and pensions, the financial tsar emphasized the need for a reference point.
“If we say that inflation is similarly decreasing, salary or pension has to compare inflation. This is not only the rule in Pakistan but throughout the world.”
Recognizing that past concerns about government expenses that were not reduced were the “correct setback”, the minister stressed that the figure had increased only 1.9 percent in the outgoing fiscal year.
“We have reduced the subsidies and debt service costs, and we increase some expenses because this country needed them. But this is our response to those who pay taxes in this country that” why it is not under the control of government expenses, “said Aurengzeb.
He pointed out that what the government was giving was doing “taking loans as we started with a deficit”, adding that if the expenses were not reduced, the loans would continue to increase.
THE STATE BUDGET
Maintaining an aggressive position on fiscal consolidation, as required by the International Monetary Fund (IMF), Aurengzeb yesterday still managed to offer some notional relief to the wage class in the federal budget for fiscal year 2025-26, together with incentives for the real estate and construction sectors, in an effort to revive the fighter of the industrial sector and stimulate economic growth.
At the same time, however, the Government announced that it was imposing a ‘carbon tax’ of RS2.5 per liter in gasoline, diesel and baking oil in the next fiscal year, which will double the following year.
It also introduced a 5 percent tax in large pensions, an 18 percent tax in imported solar panels and an increase in the surcharge of electricity debt service to finance not only interest payments, but also the main debt. In addition, he announced the gradual elimination of tax exemptions for tribal areas that begin this year.
More to follow
