TOBA TEK SINGH: Finance Minister Mohammad Aurangzeb on Tuesday reiterated the government’s commitment to reducing expenditures and boosting revenues as part of a comprehensive effort to strengthen the country’s economy on sustainable grounds.

Addressing a press conference in his hometown of Kamalia on the second day of Eid, Mr Aurangzeb said the federal government would shut down parallel ministries and departments that have been devolved to provinces.

This move is expected to significantly reduce expenditure and improve efficiency, he said, adding that the prime minister had already announced the closure of the Pakistan Public Works Department, a move expected to help reduce the government’s financial burden.

Mr Aurangzeb said the government would also privatise state-owned enterprises (SOEs), which have been a significant drain on the national exchequer. He cited the example of Pakistan International Airlines (PIA), whose liability of Rs622 billion has been transferred to the government. He hoped the privatisation of SOEs would help reduce the financial burden on the government and improve efficiency.

Finance minister insists Centre will shut down ministries, depts that have been devolved to provinces

As for airport outsourcing, the minister said Karachi airport was set to be handed over to the private sector by July or August this year, to be followed by Lahore airport.

The government is committed to reducing losses and burdens on the federal government, and these measures are part of a larger effort to achieve this goal. The minister emphasised that the prime minister was personally leading the effort to reduce expenditures and improve efficiency.

On the revenue side, the minister emphasised the need to increase the tax-to-GDP ratio from 9.5 to 13 per cent over the next three years, stressing that taxes are essential for running the country.

To achieve this goal, the government has announced revenue measures, including bringing the non-taxable sector into the tax base, gradually eliminating tax exemptions worth Rs3.9 trillion and rephrasing policies in areas like health and agriculture.

Mr Aurangzeb noted that 32,000 retailers had already been registered and would be taxed starting from July. He also emphasised the government’s commitment to bringing other sectors into the tax net.

The government, he said, was also focusing on compliance, plugging leakages in the system and implementing an end-to-end digitisation system to reduce human intervention, increase transparency and end corruption. “Sales tax automation is a top priority,” he remarked.

He reiterated government’s commitment to developing the agricultural sector, stressing that Rs41bn had been earmarked for the federal Public Sector Development Program (PSDP) to promote this sector. He said the government also intended to solarise tube wells, provide loans to small farmers and develop warehouses to facilitate small farmers.

Subsidies on fertiliser, seeds and agriculture would continue, he said, adding that banks, including Islamic banks, were being pursued to facilitate loans for farmers to help promote this sector.

In the IT sector, the government aims to facilitate freelancers and increase exports from $3.5bn to $7bn. The minister said a hefty amount has been earmarked in the budget to facilitate the IT sector.

He assured that the prime minister’s recent visit to China was focused on technology transfer, industry development, and enhancing exports, rather than seeking aid.

Overall, the government’s plans aim to strengthen the country’s economy, reduce dependence on aid and promote sustainable growth through taxes, compliance and development in key sectors like agriculture and IT.

Published in Dawn, June 20th, 2024