ISLAMABAD: Finance Minister Muhammad Aurangzeb has issued a stark warning to Pakistan’s business community, asserting that the nation cannot afford another economic boom-and-bust cycle. Speaking at a conference titled ‘Retail Reimagined: Innovate, Collaborate & Thrive’, organized by the Pakistan Retail Business Council in Islamabad, Aurangzeb emphasized the necessity of ongoing structural reforms to achieve sustainable and fair economic prosperity.
The finance minister drew attention to the critical reforms being undertaken in sectors such as taxation, energy, state-owned enterprises, and public finance. He acknowledged the retail sector’s significant role in employment and GDP, but criticized its inadequate tax contributions. “Every sector must contribute fairly to the tax system. The current financial strain on the salaried class and manufacturing and services sectors is unsustainable,” Aurangzeb stated.
Highlighting the efforts to revamp the taxation system, the minister outlined plans to adopt technology for greater transparency and to minimize revenue leakages. He stressed the importance of restoring public trust in tax authorities, noting that initiatives like digitalization and faceless customs procedures have enhanced efficiency in import clearances.
On energy reforms, Aurangzeb mentioned that stringent measures are being implemented to transition to a competitive energy market. He also spoke of ongoing reforms in state-owned enterprises, including rightsizing to be completed by June, alongside the continuation of privatization efforts.
Emphasizing the pivotal role of the private sector in driving economic growth, Aurangzeb assured that the government would maintain policy consistency and support a conducive business environment. He also highlighted fiscal discipline measures, such as pension reforms and the introduction of a defined contribution system for new civil service recruits.
Aurangzeb underscored the achievement of macroeconomic stability, citing a stable currency, increased foreign exchange reserves, and reduced inflation. The decline in the policy rate has also led to a significant drop in the Karachi Interbank Offered Rate (Kibor) from 23% to around 11%.
In a bid to improve Pakistan’s international financial standing, Aurangzeb revealed ongoing engagements with global rating agencies to elevate the country’s credit rating to the “Single B” category. He expressed that an improved credit rating would bolster Pakistan’s credibility with international investors, aiding in diversifying funding sources and regaining access to global capital markets.
To strengthen collaboration with the business community, Aurangzeb announced the establishment of an advisory committee within the finance ministry to consider industry proposals in preparation for the next budget. He urged the retail sector to formalize operations and contribute to national prosperity through increased tax compliance.
The conference underscored the retail sector’s vital contribution to Pakistan’s GDP and employment, with discussions focused on fostering growth and collaboration within the industry.
