Federal Finance Minister Senator Muhammad Aurangzeb met with members of the Pakistan Business Council (PBC) in Karachi, where he briefed them on improvements in the country’s fiscal deficits and outlined the government’s steps to ensure the current IMF program is the last one Pakistan needs.
During the visit, the Finance Minister acknowledged the significant sacrifices made by the formal sector, particularly in implementing upfront tax measures under the IMF program. He assured that as soon as fiscal conditions improve, efforts would be made to ease this burden.
In a wide-ranging discussion on the economy, PBC Chairman Shabbir Dewan commended the progress made in achieving economic stability over the past nine months. PBC members, who contribute a significant portion of direct taxes, exports, and employment, also shared their appreciation for the strides Pakistan has made.
The Finance Minister, accompanied by Khurram Shehzad, Advisor to the Finance Minister, praised the PBC for its valuable research and advocacy, particularly in areas such as taxation and its “Make-in-Pakistan” initiative. He also applauded the PBC’s report that distinguished between beneficial and harmful foreign direct investment (FDI).
PBC members recommended measures to boost exports, especially of non-traditional goods, by tapping into unused production capacity. On textiles, they urged the government to negotiate lower tariffs for apparel exports to the U.S., which sources much of its cotton from Pakistan. They also called for a review of the Export Facilitation Scheme and a reduction in the withholding tax on exports of low-margin items.
The Finance Minister acknowledged the FMCG sector’s progress in indigenizing inputs but opposed protectionism without a clear timeline for sunset clauses. He emphasized support for businesses that achieve a certain level of export sales.
On taxation, PBC members highlighted the challenges posed by the informal sector, and the Finance Minister requested help from the formal sector in identifying tax evaders. He also shared updates on the ongoing transformation of the Federal Board of Revenue (FBR), including efforts to incorporate technology to expand the tax base.
At the conclusion of the discussion, the Finance Minister asked PBC CEO Ehsan Malik to summarize the conversation and share the members’ proposals for future policy directions.
