Finance Minister asserts strict measures to increase tax revenue

ISLAMABAD: Finance Minister Muhammad Aurangzeb has asserted that the government is ready to take strict measures to increase tax collection.

Addressing a news conference in Islamabad on Sunday, Muhammad Aurangzeb briefed about the recent visit of the International Monetary Fund (IMF) delegation led by its Pakistan mission chief, Nathan Porter.

Sharing details of talks with the IMF, the finance minister said that the confidence level of the international monetary institutions in Pakistan has significantly increased.

While refuting the impression that the Pakistan-IMF talks were shrouded in secrecy, Muhammad Aurangzeb said that negotiations were primarily focused on the government’s reform agenda, whereas the IMF welcomed bringing the provincial deficit to surplus in just a short span of 14 months.

He emphasised that like the salaried class, the real sector must be included in the tax net and strict measures will be taken in this regard to increase the tax revenue.

Muhammad Aurangzeb pledged to achieve the goals for improving the economy and said that comprehensive, all-inclusive reforms are being done in all sectors of the economy.

He said that the country’s economy is improving and heading towards sustainable growth as government measures help the economy to correct its direction.

The finance minister stressed that the foreign reserves of Pakistan have increased significantly amid a decline in the interest rates.

Muhammad Aurangzeb also said that Prime Minister Shahbaz Sharif will soon share the economic road map with the nation.

Earlier, after the conclusion of a week-long visit to Pakistan, the International Monetary Fund (IMF) said that it held constructive talks with authorities in Pakistan on economic policy and reform efforts to reduce vulnerabilities.

IMF also called on Islamabad to decrease state intervention in the economy, mobilise revenue via tax reforms, and adopt prudent fiscal policies.

The mission did not state the weaknesses, but sources in Pakistan’s finance ministry have said some major lapses prompted the IMF to intervene.

Among these was a shortfall of nearly Rs190 billion ($685 million) in revenue collection during the first quarter of the current fiscal year.

Losses running into billions of dollars in the power and gas sector, the main hole in the economy, were also discussed, the IMF said, adding that structural energy reforms were critical to restore the sector’s viability.

Both sides agreed on the need to continue prudent fiscal and monetary policies, and mobilise revenue from untapped tax bases, the mission added.