ISLAMABAD WEB DESK: Pakistan’s Finance Minister, Muhammad Aurangzeb, has sounded the alarm: the country can no longer afford another boom-and-bust cycle. Speaking at the ‘Retail Reimagined: Innovate, Collaborate & Thrive’ conference organized by the Pakistan Retail Business Council (PRBC) in Islamabad, he stressed the urgent need for long-term structural reforms to ensure steady and inclusive economic growth.
Time for Serious Reforms
Aurangzeb highlighted ongoing efforts to revamp key sectors, including taxation, energy, state-owned enterprises (SOEs), and public finance. While acknowledging the retail sector’s massive contribution to employment and GDP, he criticized its relatively low tax compliance.
“ The current tax burden on the salaried class, manufacturing, and services sectors is unsustainable,” he stated.
No More Free Rides
He praised provincial governments for introducing agricultural income tax laws but emphasized that retail, wholesale, real estate, and agriculture must increase their tax contributions. “There will be no free ride anymore. Proper documentation is the key to economic progress,” he asserted.
Modernizing Taxation with Technology
Aurangzeb outlined the government’s efforts to digitize the taxation system, improve transparency, and reduce leakages. He stressed the importance of restoring public trust in tax authorities, citing initiatives like end-to-end digitization and faceless customs procedures, which have already streamlined import clearances.
Energy Sector Overhaul & SOE Reforms
On the energy front, he acknowledged the government’s tough but necessary steps to transition towards a more competitive energy market. He also confirmed that restructuring of SOEs, including rightsizing, would be completed by June this year, alongside an ongoing privatization push.
Private Sector as the Growth Engine
Aurangzeb emphasized that the private sector would play a central role in economic expansion, while the government ensures policy consistency and a business-friendly environment. He also touched on pension reforms and fiscal discipline, including a defined contribution system for new civil service recruits.
Macroeconomic Stability in Sight
The minister pointed to significant progress, including:
- A stable currency
- Rising foreign exchange reserves
- Lower inflation
- A major drop in the policy rate, which brought Kibor down from 23% to around 11%
Pakistan is actively working with international credit rating agencies to improve its standing to the “Single B” category. “A rating upgrade will strengthen Pakistan’s credibility, attract international investors, and unlock access to global capital markets,” he noted.
Strengthening Government-Business Collaboration
In a significant move to enhance cooperation, Aurangzeb announced the formation of an advisory committee within the finance ministry to integrate industry insights into the next budget.
Retail Sector Must Step Up
He urged the retail sector to formalize businesses and contribute to the national economy. PRBC Chairman Ziad Bashir echoed this sentiment, acknowledging the sector’s substantial role in Pakistan’s GDP and employment.
The event featured expert panel discussions and keynote addresses aimed at driving growth and fostering stronger partnerships within Pakistan’s retail industry.
Final Takeaway
Pakistan stands at a crucial economic crossroads. Structural reforms are not just an option—they are essential for long-term stability. With a firm commitment to change, the country can break free from its history of economic instability and move toward a more prosperous and sustainable future.
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