Finance Minister Mohammad Aurangzeb has emphasized that it’s time to include the real estate, retail, and agriculture sectors in Pakistan’s tax system. He stated that the government could no longer rely solely on taxes from salaried workers and manufacturers, whose tax rates already reach up to 50%.
Aurangzeb argued that further tax increases on these groups are not feasible, and the only solution is to expand the tax base. He made it clear that taxes must be collected from these sectors to ensure a fair and sustainable tax system for all.
Aurangzeb also pointed out that he disagreed with the argument that real estate boosts 40 other industries. He said the government must focus on these sectors, which have long been outside the tax system. He added that as a salaried person, he had paid taxes, and that information would be made public under asset and income declarations for parliamentarians.
The Finance Minister also spoke about Pakistan’s relationship with the International Monetary Fund (IMF), saying there was a trust and credibility gap due to unfulfilled commitments. The IMF is scheduled to visit Islamabad to assess the situation. According to Aurangzeb, the government had met its revenue targets from retailers and wholesalers for the first quarter of the fiscal year, and the IMF had approved the winter electricity package. He acknowledged, however, that structural reforms agreed with the IMF had not always been fully implemented.
Speaking about the state-owned Pakistan International Airlines (PIA), Aurangzeb said the government could not manage it effectively and would again pursue privatization as a solution.
Aurangzeb also provided an update on the government’s plans for agriculture taxation. He confirmed that all four provincial cabinets had agreed to implement an agriculture income tax, which will take effect from January 1, 2025, with collections beginning in the next fiscal year.
The Minister highlighted that the era of relying on foreign financial aid from countries like China, Saudi Arabia, the UAE, and Qatar is over. Now, Pakistan needs to focus on attracting foreign direct investment (FDI) through viable projects. Aurangzeb stressed that the country could not rely on increasing imports for growth, as this would lead to a balance of payments crisis. Instead, Pakistan must focus on export-led growth to achieve long-term economic stability.
