ISLAMABAD: The state has decided to collect unpaid taxes from all industries, including wholesale, real estate, and agricultural, which have up till now avoided paying their fair share of taxes.
Muhammad Aurangzeb, the finance minister, made this claim in an unexpected Sunday televised address. In order to address pressing issues including population growth, child stunting, and climate change, the minister also advocated for a national “Charter of Environment.”
“This [tax payment] is not a request.” The finance minister declared, “This is something that we have to do.”
He claimed that “compliance and enforcement” would be used to recoup these taxes and that everyone would need to support the national economy, whether they were involved in wholesale, real estate, or agricultural.
Because our hand has been pushed as a nation, we will be extremely strict on compliance and enforcement. In an apparent attempt to allay the opposition of different stakeholders to joining the tax system or paying their fair share of taxes, the minister stated, “I am very clear about it and I want everybody to move forward with this clarity.”
He reaffirmed that taxes from all sectors were inevitable and that the manufacturing and salaried classes could no longer be taxed.
Climate crisis
The minister, who was recently in Baku for the COP29 session, claimed that child stunting, population increase, and the climate catastrophe have turned into “existential problems.”
According to him, in order to create a Charter of the Environment, all facets of society—including the media and political parties—must begin discussing these issues and work together.
He claimed that 40% of Pakistani youngsters had stunted growth, and that the country’s economy could not expand from $300 billion to $3 trillion by 2047 at the current rate of population increase.
The minister also brought attention to the large number of youngsters who are not in school, the majority of whom are girls.
We are in the midst of a climate and demographic crisis. “This cannot be done in a sequential manner,” he stated, adding that issues like pollution, decarbonization, and flooding should be discussed by the media, political parties, and others.
The finance minister claimed that in just 14 months, Pakistan’s “macroeconomic turnaround” had received praise from the international community, including credit rating agencies and multilateral lenders.
But he cautioned that the country should “stay the course” and build on this emerging stability, saying there was no space for complacency.
Speaking about the recent visit by the International Monetary Fund (IMF) team, the minister stated that via improved understanding, such interactions foster confidence and trust.
Prime Minister Shahbaz Sharif will soon unveil “a homegrown economic roadmap” for this aim, which was developed following discussions with all relevant parties.
IMF meetings
According to Mr. Aurangseb, he reiterated the need for more funding for climate resilience, for which the Asian Development Bank recently provided $500 million.
He claimed that because the discussions with the IMF were founded on quarterly quantitative and structural standards, they went well.
He clarified that these included reforms in public finance, energy and state-owned enterprises, taxation, and the privatization program, adding, “There is nothing in these promises or discussions against the interest of Pakistan.”
According to him, the IMF was informed on the bureaucracy’s rightsizing and the future course of this process, and the structural benchmarks that were due by the end of September had been fulfilled.
Regarding public finance, including provincial taxes and other duties, the finance minister praised the collaboration of the four chief ministers.
With the goal of enhancing the hard-won macroeconomic stability, it was a “whole of government approach.”
The minister claimed that the policy rate had dropped from 22 percent to 15 percent and that inflation had decreased from 38 percent to merely 7 percent. After only covering imports for two weeks, the foreign exchange reserves were now sufficient to cover imports for two and a half months.
