The Minister of Finance, Muhammad Aurengzeb, emphasized on Wednesday that planned tariff reforms that would reduce import tariffs were the key to an economy led by exports in Pakistan.
He made the comments during a press conference after the budget where he expanded on the federal budget proposed yesterday for the next fiscal year.
Maintaining an aggressive position on fiscal consolidation, as required by the International Monetary Fund (IMF), Aurengzeb yesterday still managed to offer a 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 to revive the industrial sector of struggle and the fiscal food.
When heading to an informative media session in Islamabad today, Aurengzeb 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, ”he said.
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 measures were only for next year and will be taken more gradually.
Expanding even more on the subject when answering a consultation. Aurengzeb said: “This is a moment of East Asia for Pakistan. What was available in the fiscal space is the direction of the trip. We have tried to reduce tariffs. This is not the eventual final state.”
At the beginning of the press conference, journalists expressed their concerns about not receiving a technical informative 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.
Concluding his address, Aurengzeb recognized the “concern” caused to journalists and said that “he regretted if there was something like that”, referring to journalists who were not informed.
However, added the minister, he and the president of FBR “had appeared before you in terms of having such discussions.” “We will continue to accelerate this,” he said, hinting at a commitments plan with journalists every four or six weeks.
‘Salaries and pensions linked to inflation’
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.”
The minister also pointed out the connection between salary and inflation when asked why the minimum wage of RS37,000 would not increase in next year.
“Go to the industries and get your comments on the minimum wage. I think we are in a good place,” he said.
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.
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.
‘Na, Senate Chief Salaries uploaded after 9 years’
When asked about a recent increase in the wages of the president of the Senate and the president of the National Assembly, the minister said that the last time his salaries were “adjusted” were in 2016. He stressed that the walk was “suddenly”, since it had not been done during the last nine years.
Answering a question about how the Federal Government could in front of the population of the Prize of the National Finance Commission (NFC), said Aranzgeb: “Everything will be done in consultation with the provinces.”
He added: “Nothing will be done [without them]including the National Fiscal Pact that we sign with the provinces. “
The minister also recognized the lack of implementation in suggested measures: “In the last 10 years, I have been looking at the state of the economy, first in the private sector and now in this work. I have never seen anything in the decline.
“It could be wrong; maybe it could have happened in some year,” he added. “It begins with recognition, the undue burden we had, as Prime Minister said before,” said Aurengzeb.
“The things that had never been reversed before have now been reversed, but that is not the eventual state,” said the financial tsar.
He made it clear that the segments that have been under an improper burden, “be it the formal sector, the beneficiary sector, the wage class,” the government should at least give a sign that it was “serious.” “This is just a signaling in my perspective from the right direction,” said finance minister.
Aurengzeb said that the government had taken two “very specific measures” to carry the cash -based economy of RS9.4tr or more to the documentation.
Responding a consultation on circular debt, the president of FBR highlighted the reviews last year for the contracts of energy companies. He affirmed that the electricity sector wanted “important reforms towards cheap credit and an enabling environment.”
More to follow
