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• Aurangzeb says paying fair share of tax ‘now compulsory’; asserts ‘use of force’ for recovery
• Calls for Charter of Environment to address ‘existential issues’ like climate change, stunting
• Terms meetings with IMF positive; hails macroeconomic stability
ISLAMABAD: The state has made up its mind to recover due taxes from every sector, including real estate, wholesale and agriculture, which have, until till now, avoided sharing the burden of taxation.
This was stated by Finance Minister Muhammad Aurangzeb in a sudden television speech on Sunday. The minister also called for a national ‘Charter of Environment’ to address growing challenges like climate change, child stunting and population explosion.
“This [paying of taxes] is not a request. This is something which we have to do,” the finance minister said.
He asserted that these taxes would be recovered through “compliance and enforcement”, and everybody, whether it was real estate, wholesale or agriculture, would have to contribute to the national economy.
“We are going to be very firm, very firm on compliance and enforcement because as a country our hand has been forced … I am very clear about it and I want everybody to move forward with this clarity,” the minister said in an apparent attempt to address the resistance from various stakeholders over becoming part of the tax net or paying their fair share of taxes.
He reiterated that tax contribution from all sectors was unavoidable and that it was no longer possible to keep taxing the salaried class and manufacturing sector.
Climate emergency
The minister, who was recently in Baku to attend the COP29 summit, said climate emergency, population growth and child stunting had become “existential problems”.
He said every segment of society, whether political parties or media, will have to start talking about these challenges and move forward with unity to form a Charter of Environment.
He said 40 per cent of children in Pakistan had stunted growth, and the way the population was growing, this was not sustainable for the country to grow from a $300bn to a $3trillion economy by 2047.
The minister also pointed out the huge population of out-of-school children, most of whom are female.
“We are facing a population and climate emergency. This cannot be done sequentially,” he said, adding that the media, political parties and others should discuss challenges like flooding, decarbonisation and pollution.
The finance minister said the international community, including multilateral lenders and credit rating agencies, had complimented Pakistan’s “macroeconomic turnaround” in just 14 months.
However, he warned there was no room for complacency and that the nation should “stay the course” and build upon this nascent stability.
Talking about the recent visit by the International Monetary Fund (IMF) mission, the minister said engagements like this build confidence and trust through better understanding.
For this purpose, Prime Minister Shahbaz Sharif would shortly announce “a homegrown economic roadmap” devised after consultations with all stakeholders.
Meetings with IMF
Mr Aurangseb said he repeated the need for additional support for climate resiliency for which the Asian Development Bank had recently disbursed $500m.
He said the talks with IMF progressed in a positive manner as they were based on quarterly quantitative and structural benchmarks.
“There is nothing in these promises or discussions against the interest of Pakistan”, he said, elaborating that these included reforms in taxation, energy and state-owned entities; privatisation agenda; and public finance.
He said the structural benchmarks required by the end of September had been met and the IMF was updated on the rightsizing of the bureaucracy and how this process would be taken forward.
The finance minister commended all four chief ministers for their cooperation on public finance, including provincial taxes and other responsibilities.
It was a “whole of government approach” with the resolve of building upon the hard-earned macroeconomic stability.
The minister said this inflation had reduced from 38pc to just 7pc and the policy rate from 22pc to 15pc. The foreign exchange reserves were now enough to cover two and half months of imports from just two-week import coverage.
Published in Dawn, November 18th, 2024
