Finance Minister Aurangzeb Urges Tax Reforms for Economic Stability

Pakistan's Finance Minister, Muhammad Aurangzeb, recently addressed the media, highlighting the urgent need for tax reforms to strengthen the country's financial position. He emphasized the significance of expanding the tax base and reducing exemptions to boost revenue generation.

Aurangzeb underlined the target of increasing the tax-to-GDP ratio from 9.5% to 13%, essential for the country's economic stability. To achieve this goal, the government plans to bring more sectors under taxation, focusing on direct taxes and eliminating current exemptions. Notably, sectors like health and agriculture are set to see reduced exemptions.

In a bid to enhance tax compliance, the minister announced the registration of 32,000 retailers for taxation, effective from July. Addressing enforcement challenges, Aurangzeb acknowledged the issues with the track and trace system's implementation, leading to revenue losses. To tackle this, the government is collaborating with consulting firm McKinsey to introduce digitalization and automation processes.

Furthermore, Aurangzeb acknowledged taxpayer concerns regarding harassment and frivolous notices, drawing from his own experiences. He also revealed plans to privatize Karachi airport by July or August, aiming to improve operational efficiency. Additionally, the minister disclosed intentions to streamline government operations by shutting down devolved ministries or departments, reducing expenditure and enhancing efficiency.

Finance Minister Aurangzeb's emphasis on tax reforms underscores the government's commitment to strengthening Pakistan's financial landscape. By broadening the tax base, reducing exemptions, and improving enforcement mechanisms, the country aims to achieve greater economic stability and sustainable growth. These initiatives not only address current challenges but also pave the way for a more robust and efficient financial system, benefiting the nation as a whole.