Aurangzeb announces major tax and economic reforms, restrictions on non-filers

Washington-(Mudassar Iqbal)-Finance Minister Muhammad Aurangzeb, speaking at a press conference in Washington, outlined significant economic reforms and tax policies aimed at increasing transparency and sustainability in Pakistan’s economy.

Aurangzeb emphasized that no one will be harassed for taxes, with data-driven assessments now central to tax collection efforts. He also announced new restrictions for non-filers, stating they will be unable to open bank accounts or purchase property, pending legislative approval.

Aurangzeb highlighted upcoming reforms in the Federal Board of Revenue (FBR), aimed at boosting transparency and fostering sustainable development. “We are taking difficult decisions to improve the economy. Our focus includes reducing imports, increasing exports in sectors like IT and agriculture, and transitioning government-owned enterprises to private management where feasible,” he said.

During discussions with international financial institutions, Aurangzeb reported positive responses and an ongoing cooperative dialogue with the IMF, expressing hope that this IMF program will be Pakistan’s last. He added that Pakistan’s foreign currency reserves now stand at $11 billion, reflecting a positive trajectory according to rating agencies.

Aurangzeb also held meetings with the Saudi Finance Minister and China’s Vice Finance Minister Liao Min, emphasizing Pakistan’s commitment to strong bilateral relationships. Aurangzeb confirmed plans to issue Pakistan’s first panda bond in the Chinese market and reassured robust security for Chinese citizens in Pakistan.

Additional meetings with global tech and financial leaders underscored Pakistan’s digital ambitions. Google Vice President Kiran Bhatia discussed Google’s ongoing investments and plans to support Pakistan’s economy, while Visa’s Regional President Andrew Torre reviewed efforts to modernize the payment system in Pakistan, including support for local institutions like OneLink. The Finance Minister praised Visa’s Financial Inclusion Card initiative, a collaborative effort with private banks to enhance consumer access and ensure fair transaction processing options.

Aurangzeb conveyed the government’s commitment to driving sustainable economic growth and building a resilient financial system in Pakistan.

Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb appreciated Pakistani diaspora community on their valuable contributions in bolstering economic, business and investment ties between Pakistan and the United States.

During an interaction with diaspora leaders, the minister briefed them on the socio-economic developments in Pakistan and shared details of his weeklong engagements in Washington DC, according to press release issued by finance ministry here Sunday.

The minister, during an interaction with Pakistani-American tech entrepreneurs, identified IT as one of the burgeoning sectors of the economy and informed that Pakistan ranked among top 5 countries in terms of freelancing.

He highlighted the contribution of IT sector to the rising exports of the country and informed that digital ecosystem was being enabled through a broad range of legislative, policy, regulatory and operational initiatives.

He expressed satisfaction over the outcome of his engagements with different stakeholders on the sidelines of the Annual Meetings 2024 and underlined the importance of staying the course on reforms.

The minister also met with the President of AIIB, Jin Liqun and acknowledged the Bank’s support to Pakistan, particularly in dealing with the aftermath of the devastating floods of 2022.

He recalled his previous visit to China where he interacted with the management of Peoples Bank of China (PBOC). He indicated that government wanted to diversify its financing base and explore the possibility of issuing a panda bond with partial credit guarantee of AIIB.

He added that engaging AIIB as an anchor to support the process would send out a strong signal to the market.

The option of a no-deal roadshow first followed by a deal roadshow was also discussed. He expressed satisfaction over the progress of portfolio of AIIB projects in Pakistan and further efforts to improve the disbursement of ongoing projects.

On the infrastructure side, he invited AIIB to invest in N-5 (GT Road) reconstruction project and also provide support in terms of program loan for dealing with the impacts of climate change and disaster preparedness.

He also welcomed the upcoming visit of Vice President (Operations) wherein issues of mutual interest would be discussed and portfolio of ongoing projects reviewed and pipeline firmed up.

He invited the President to visit Pakistan which he accepted at mutually convenient dates to be decided later.