Govt eyes revenue boost, expenditure cut to revive economy: Aurangzeb

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.

Budget 2024-25 updates: Pakistan targets 3.6% growth, 38% higher FBR taxes as Aurangzeb presents proposals

The move is expected to significantly 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.