KARACHI, (TDI): Pakistan’s Federal Minister of Finance, Muhammad Aurangzeb, today addressed the Pakistan Business Council (PBC), underscoring the country’s strides towards economic stability and the government’s commitment to long-term fiscal reforms.
The meeting, which included key stakeholders from the business community, focused on Pakistan’s economic trajectory, challenges, and strategies for future growth.
During the session, PBC Chairman Shabbir Diwan commended the significant progress made by the country over the past nine months, particularly in addressing the twin deficits.
Diwan pointed out that PBC members contribute substantially to the nation’s economy, paying one-third of direct taxes, generating 40% of exports, and employing millions through their extended value chains.
Also Read: Aurangzeb: Prudent Policies Put Economy Back on Track
This affirmation of the private sector’s role came alongside the minister’s briefing on the government’s ongoing efforts to stabilize the economy under the International Monetary Fund (IMF) program.
Aurangzeb highlighted key measures aimed at ensuring that Pakistan’s dependence on IMF programs would be eliminated in the future. He acknowledged the sacrifices made by the formal sector, especially through front-loaded tax measures, and reassured that as fiscal space improves, efforts will be made to alleviate these burdens.
Accompanied by Mr. Khurram Shehzad, Advisor to the Finance Minister, Aurangzeb also lauded the PBC for its high-quality research and effective advocacy, particularly in the areas of taxation and its “Make-in-Pakistan” theme.
He specifically praised PBC’s report on foreign direct investment (FDI), which distinguished between beneficial and detrimental investments.
The discussion also covered several key policy recommendations. PBC members called for measures to boost exports, especially non-traditional goods, by unlocking the country’s significant underutilized industrial capacity.
Also Read:KSE-100 Index Regains 1,525 Points Limit
The textile sector, in particular, urged the government to negotiate lower tariffs on apparel exports to the United States, emphasizing the growing trade between the two countries, as Pakistan is now the largest buyer of U.S. cotton.
Further recommendations included a review of the Export Facilitation Scheme to allow domestic suppliers to support exporters without facing sales tax levies. Additionally, members called for a reduction in the 2% withholding tax on export receipts for low-margin items, which would alleviate financial pressure on exporters.
On the issue of import substitution, the finance minister acknowledged progress in the Fast-Moving Consumer Goods (FMCG) sector’s efforts to localize inputs. However, he cautioned against blanket protectionism without a sunset clause and expressed support for companies that achieve a specific percentage of exports.
Addressing taxation, the minister noted concerns raised by members regarding the unlevel playing field between the formal and informal sectors.
Aurangzeb requested the support of the formal sector in identifying tax evaders, and shared updates on ongoing reforms within the Federal Board of Revenue (FBR), emphasizing its modernization and the infusion of technology to broaden the tax base.
In closing the meeting, the minister asked PBC CEO Ehsan Malik to summarize the discussions and share the proposals put forward by the members.
The exchange marked a crucial step in fostering continued dialogue between the government and the private sector, as Pakistan works to stabilize its economy and navigate the challenges of the global economic landscape.
