Finance minister eyes parliament's support in boosting tax revenue

• "People will have to pay taxes," Finance Minister Aurangzeb says.
• Minister laments country's current 9% tax-to-GDP ratio.
• "Country has no option but to go for structural reforms," he notes.
  

ISLAMABAD: Finance Minister Muhammad Aurangzeb has said that he will seek parliament's support to allow the government to increase its tax revenue generation amid the prevailing dire economic situation faced by the Prime Minister Shehbaz Sharif-led government, The News reported on Wednesday.

"People will have to pay taxes. I will request parliament extend its support to the government for an increase in tax revenue and to improve the energy equation," the finance minister said while speaking on the National Assembly floor.

Lamenting Pakistan's current tax-to-GDP ratio of 9%, Aurangzeb apprised the house that the country has no option but to go for structural reforms.

His remarks come days after Islamabad made a formal request to the IMF for a new bailout package in the range of $6 to $8 billion under Extended Fund Facility (EFF) with the possibility of augmentation through climate financing.

However, the exact size and time frame will only be determined after evolving consensus on the major contours of the next programme in May 2024.

Pakistan has shown its interest and also made a request to dispatch the IMF review mission in May 2024 to firm up details of the next bailout package of three years period under EFF programme.

Commenting on the country's foreign exchange reserves, the finance czar recalled that Islamabad's forex reserves stood at $3.4 billion when the incumbent government assumed office. However, he added, currently Pakistan has $8 billion of forex reserves and will receive $1.1 billion from the International Monetary Fund (IMF) soon.

He also highlighted that currently, as per the State Bank of Pakistan (SBP), the inflation stands at 20.7% instead of the previous figure of 38%.

"It has been stated by the SBP that inflation will come down to 5 to 7%," he added.

A day earlier, while speaking at the 2024 Islamabad Business Summit, the minister stated that the country's foreign exchange reserves will reach $10 billion by June of this year.

He also remarked that the gross domestic product (GDP) growth is expected to be at 2.6% in FY2024.