Marginable decrease in inflation witnessed, says Finance Minister

Federal Finance Minister Mohammad Aurangzeb announced on Sunday that a noticeable decrease in inflation has been achieved due to the current government’s economic strategies.

According to the 24NewsHD TV channel, speaking at a press conference in Islamabad, he highlighted that inflation is now in the single digits, signaling positive economic developments.

Aurangzeb credited Prime Minister Shahbaz Sharif’s tireless efforts for this progress. He emphasized that, under the current administration, exports have surged by 29%, the IT sector has shown growth, and foreign reserves held by the State Bank of Pakistan (SBP) have reached their highest levels.

He reiterated government’s commitment to reduce size of federal government, adding decision regarding abolition or merger of six ministries has already been made and was at implementation stage, however added the government would need to amend Civil Servant Act 1973 for the purpose. He said, after this process is over, next five ministries would be taken for process.

On tax side, the minister said, the return filing has increased double from last years 1.6 million to 3.2 million until date whereas there were 300,000 new filers last year, however the number has risen to 723,000 until now. He said, this shows governments resolve to move forward.

In addition, he said, the terms non-filers and under filers have been abolished. The minister said there was around Rs1.3 trillion estimate tax evasion by individuals.

He said, if Pakistan wanted to be included in G20, it has to document its economy and do away with cash economy. He said, the country’s economy actually stands at $700 plus currently however it is shown only $325 billion.
Even tax collection could have Rs7 trillion upside impact as government goes forward. He said, there were 3 lack manufactures, only 14 % are registered whereas as out of 3 lac wholesalers, only 25 were registered in sales tax.

He said, government would make it condition for manufacturers to sell their products only to registered wholesalers. Likewise, he added government was also working on anti-smuggling measures and would introduce digital check post to have positive tax impact of around Rs700 billion.

He said, for uplifting the economy and implementing the reform measures, there could be a short term pain as there was no other option. However he made it clear that tough decision had to be implemented to put Pakistan on sustainable growth path.

I have termed population growth at 2.55 percent and climate change as two major challenges which need proper consideration.

He further outlined stricter regulations for non-filers, restricting their ability to conduct transactions such as buying or selling vehicles and properties, operating bank accounts, or withdrawing cash. To increase tax compliance, I have stated that the government will compare declared assets with tax statements and only registered wholesalers will be allowed to trade goods.

The minister also introduced plans to utilize the latest technology, such as RFID and video analysis, to curb tax evasion and improve the working relationship between businesses and the Federal Board of Revenue (FBR). Additionally, smuggled goods worth Rs750 billion have been seized under government action.

Aurangzeb expressed the need for broader reforms, particularly in enhancing the audit capabilities of the FBR by involving third-party chartered accountants. He said that no actions against tax evaders would be taken without hearings, and decisions will be made on merit.

Finally, the minister stressed the importance of making the current International Monetary Fund (IMF) program, which includes a $7 billion bailout, the last one for Pakistan. I have stressed the need for hard work and basic economic reforms to improve the country’s economic future, ensuring the continuation of this agenda despite the challenges.