Aurangzeb Urges Economic Overhaul at Islamabad Press Conference

In a significant press conference held in Islamabad, Finance Minister Muhammad Aurangzeb emphasized the urgent need for a fundamental transformation of Pakistan's economy. He stated that the country’s economic “DNA needed to be fundamentally changed” to ensure that the latest agreement with the International Monetary Fund (IMF) would be the last one. This statement comes in the wake of the IMF Executive Board's approval of a 37-month, $7 billion Extended Fund Facility for Pakistan on September 25.

During the conference, Aurangzeb, accompanied by the chairman of the Federal Board of Revenue (FBR), discussed various fiscal challenges facing the nation. He expressed optimism about the newly negotiated IMF deal, highlighting it as good news for Pakistan. The agreement, which was reached after extensive discussions, aims to stabilize the economy and address pressing financial issues.

One of the most striking remarks made by the finance minister was his call for a “nuclear war” against the cash-based economy. He argued that without comprehensive documentation of the economy, meaningful reforms would be impossible. Aurangzeb pointed out that the current account surplus observed in the previous month was largely due to strong remittances and other positive economic indicators.

To ensure the sustainability of the IMF arrangement, Aurangzeb stressed the necessity for substantial adjustments across various sectors. He acknowledged that the FBR’s tax audit capabilities require a thorough review and announced plans to employ 2,000 chartered accountants to enhance these capabilities. Furthermore, he mentioned the development of a new interface aimed at monitoring activities to prevent harassment of individuals by auditors.

Addressing the issue of tax collection, the finance minister stated, “We must control under-filing in a structured and professional manner.” He assured that independent auditors would be engaged to investigate and consult with the public on these matters. Additionally, Aurangzeb tackled the concerns of international investors regarding stalled dividends and profits in Pakistan, indicating that the government is committed to resolving these issues to restore investor confidence.

When discussing the broader implications of economic stability, Aurangzeb noted that both inflation and policy rates have seen a decline. He encouraged the industry to focus on the Karachi Interbank Offered Rate (Kibor) rather than solely on the policy rate, expressing hope that as inflation decreases, the policy rate will follow suit.

The finance minister's remarks reflect a critical juncture for Pakistan's economy. The call for a comprehensive overhaul and the commitment to addressing long-standing issues signal a proactive approach to economic management. As the government embarks on this journey of reform, it is essential for all stakeholders, including the public and investors, to remain engaged and informed. The path ahead may be challenging, but with concerted efforts and a clear vision, Pakistan can aspire to achieve lasting economic stability and growth.