Finance Minister’s Insights and Addressing Economic Challenges

June 21, 2024Zayn0

On Tuesday, Finance Minister Muhammad Aurangzeb stated that many state institutions were running at a loss and that it was exceedingly difficult for the federal government to provide relief to the salaried class in the current budget.

Fiscal Deficit Reduction

Speaking at a brief press conference on the second day of Eid Ul Azha from his birthplace of Kamalia, he stated that while hospitals and schools may run on donations, a nation’s economy cannot depend on them. To lower the fiscal deficit, he emphasized the necessity of strictly enforcing tax laws and eventually phase-out tax exemptions completely.

Expanding the Tax Net

Aurangzeb announced plans to include all sectors in the tax net and emphasized the urgent need for the Federal Board of Revenue (FBR) to be fully digitalized. He said that this would help minimize human interaction, reduce corruption, and increase transparency.

He also emphasized that the country’s GDP and overall economic health depended on taxation and emphasized that expanding the tax net beyond retailers to include various other sectors was important. He acknowledged that the public was reluctant to interact with the FBR because of strict notices, and he promised reforms to address these issues.

Controlling Fiscal Imbalance

The finance minister lauded freelancers for their contributions while working from home and stated in response to a question that the agriculture and IT sectors are independent of the International Monetary Fund (IMF).

According to Aurangzeb, to control the fiscal imbalance, the administration intends to reduce federal spending. He emphasized the significance of selling off loss-making state-owned firms (SOEs), citing Pakistan International Airlines (PIA) as an example, which has a liability of Rs. 622 billion that has been transferred to the government.

Privatization and Technological Integration

Aurangzeb demanded the quick privatization of all responsible SOEs, calling the current situation untenable. The former banker disclosed that Karachi Airport would be outsourced by August as a component of the privatization initiatives meant to lessen the government’s financial burden. He emphasized the government’s emphasis on using the private sector to further national development and called for the integration of technology into the agriculture industry.

China Visit and Technology Transfer

He added that rather than looking for further investments, the current visit to China was centered on technology transfer to Pakistan. During their visit, Prime Minister Shehbaz Sharif also made stops at Chinese agricultural research universities.

Zayn

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