Federal Finance Minister Senator Muhammad Aurangzeb on Tuesday reiterated a government’s commitment to reduce expenditures and boost revenues as part of a comprehensive effort to strengthen the country’s economy on sustainable grounds, state-run APP reported.
Addressing a press conference in his hometown, Kamalia, the minister said the federal government would shut down parallel ministries or departments that have been devolved to provinces.
The move is expected to reduce expenditure and improve efficiency, adding, the prime minister has already announced the closure of Pakistan Public Works Department, a move that is expected help reduce the financial burden on the government.
Secondly, the government plans to privatise the state-owned enterprises (SOEs), which have been a significant drain on the national exchequer.
Around 24 SOEs to be privatised in coming years
The minister cited the example of Pakistan International Airlines (PIA) that has a liability of billions of rupees, which has been transferred to the government.
The privatisation of the SOEs is expected to help reduce the financial burden on the government and improve efficiency.
The minister also announced that the government was working on airport outsourcing, with Karachi airport set to be handed over to the private sector by July or August this year, to be followed by Lahore airport.
On revenue side, the minister emphasised the need to increase the tax-to-GDP ratio from 9.5% to 13% over the next three years, stressing that taxes are essential for running the country.
To achieve this goal, the government has announced revenue measures, including bringing the non-taxable sector into the tax base, gradually eliminating tax exemptions worth Rs3.9 trillion, and rephrasing policies in areas like health and agriculture.
The minister announced that 32,000 retailers had already been registered and would be taxed starting from July 2024, and emphasised the government’s commitment to bringing other sectors into the tax net.
He further added that the government was also focusing on compliance, plugging leakages in the system, and implementing an end-to-end digitisation system to reduce human intervention, increase transparency, and end corruption.
Sales tax automation is a top priority, according to Aurangzeb.
He reiterated government’s commitment to develop the agricultural sector, saying Rs41 billion had been earmarked the federal Public Sector Development Program (PSDP) to promote the sector, adding that the government also intended to solarise tube wells, provide loans to small farmers, and develop warehouses to facilitate small farmers.
Subsidies on fertiliser, seeds and agriculture would continue, the finance minister said, adding that banks, including Islamic banks, were being pursued to facilitate loans for farmers to help promote the sector.
Budget 2024-25: IT sector unhappy with proposals
In the IT sector, the government aims to facilitate freelancers and increase exports from $3.5 billion to $7 billion. He said, an hefty amount had been earmarked in the budget to facilitate IT sector.
The minister assured that the prime minister’s recent visit to China was focused on technology transfer, industry development, and enhancing exports, rather than seeking aid.