ISLAMABAD: Finance Minister Muhammad Aurangzeb on Thursday cautioned the business community that the country cannot afford another boom-and-bust cycle, stressing the need for continued structural reforms to ensure sustainable and equitable prosperity.

Speaking at a conference on ‘Retail Reimagined: Innovate, Collaborate & Thrive’, organised by the Pakistan Retail Business Council (PRBC) in Islamabad, the minister highlighted ongoing structural reforms in taxation, energy, state-owned enterprises (SOEs) and public finance.

He acknowledged the significant contribution of the retail sector to employment and GDP but criticised its low tax contribution. “Every sector must contribute to taxes. The current burden on the salaried class, manufacturing and services sectors is unsustainable,” he said.

Mr Aurangzeb also commended provincial governments for legislating agricultural income tax but stressed that retail, wholesale, real estate and agriculture sectors must increase their tax contributions. “There will be no free ride anymore. Documentation is key to achieving this goal,” he said.

Aurangzeb says there will be no more free rides; all sectors must contribute to taxes

The minister outlined the government’s efforts to modernise the taxation system through technology to enhance transparency and curb leakages. He stressed the need to restore public trust in tax authorities, highlighting that end-to-end digitisation and faceless customs procedures had already streamlined import clearances.

On the energy front, Mr Aurangzeb stated that tough measures were being implemented to transition towards competitive energy. He also noted that structural reforms in SOEs were underway, with rightsizing to be completed by June this year, along with the continuation of the privatisation process.

The minister emphasised that the private sector would be the main driver of economic growth, with the government ensuring policy consistency and a conducive framework. He also highlighted pension reforms and fiscal discipline measures, including a defined contribution system for new civil service recruits.

He insisted that macroeconomic stability had been achieved, pointing to a stable currency, increased foreign exchange reserves and reduced inflation. The policy rate decline also led to a significant decrease in Kibor from 23pc to around 11pc.

Mr Aurangzeb revealed that Pakistan was actively engaging with international rating agencies to improve its credit rating to the “Single B” category. He said a rating upgrade would enhance Pakistan’s credibility among international investors, allowing the country to diversify its funding sources and regain access to global capital markets.

To foster collaboration with the business community, the finance minister announced the formation of an advisory committee within the finance ministry to consider industry proposals ahead of the next budget.

He stressed that structural reforms were crucial for sustainable growth, urging the retail sector to formalise businesses and contribute to national prosperity.

PRBC Chairman Ziad Bashir highlighted the retail sector’s significant contribution to Pakistan’s GDP and employment.

“This conference reaffirms our commitment to innovate, collaborate and thrive in an ever-evolving business landscape,” he said.

The event featured panel discussions and keynote addresses focused on enhancing growth and collaboration within the country’s retail industry.

Published in Dawn, February 21st, 2025