KARACHI: Finance Minister Moham­mad Aurangzeb on Monday said the government is finalising an industrial policy aimed at fostering a business-friendly environment and accelerating industrialisation, as Pakistan moves towards macroeconomic stability and sustainable growth.

Speaking at a consultative workshop titled ‘Unlocking Capital Market Potential for Banks’, organised by the Securities and Exchange Commission of Pakistan (SECP) and the Pakistan Banks Association (PBA), the minister said the policy, spearheaded by Special Assistant to the Prime Minister Haroon Akhtar Khan, would soon be presented to the federal cabinet.

Aurangzeb also underlined the government’s commitment to tariff reform, calling it a home-grown agenda designed to enhance export competitiveness. The policy includes gradually reducing customs duties, additional customs duties, and regulatory duties over the next four to five years to reduce long-standing protectionist barriers in domestic industries.

Rejecting concerns that tariff reductions could affect revenue collection, he stressed the importance of moving away from short-term thinking. “It is time to focus on long-term national interests, not temporary revenue fixes,” he remarked.

Eyes growth with tariff cuts, economic reforms

A key structural shift, the minister revealed, is that the tax policy office has been moved to the Finance Division. As a result, the FY27 federal budget will be formulated by the Finance Division, with the Federal Board of Revenue (FBR) no longer responsible for budget planning — a move expected to create a clearer division between tax policy and tax administration.

Calling for greater focus on capital market development, Aurangzeb proposed the establishment of a Capital Mar­ket Development Council to steer policy and growth. He said well-functioning capital markets are essential for ensuring long-term macroeconomic stability.

Touching on broader economic and governance issues, he said Pakistan had exited the Financial Action Task Force (FATF) grey list and expressed confidence it would remain out. On exchange rate policy, he reiterated that the State Bank of Pakistan (SBP) independently determines the exchange rate mechanism.

He also flagged climate change and population growth as two of the country’s most urgent existential threats. “If we don’t address these challenges, we won’t reach where we want to be by 2047,” he warned.

Commenting briefly on the recent flo­ods in Khyber Pakhtunkhwa, the minister said it was too early to estimate damages as relief operations were still ongoing.

Separately, while inaugurating the PHC Job Fair and Education Expo 3.0 at Expo Centre Karachi, Aurangzeb said the country had achieved macroeconomic stability over the past two years and is now poised to transition into a growth phase. He urged the private sector to take the lead in driving economic momentum.

As part of reforms to broaden the tax base, he said the government was also working to reduce tax rates for the manufacturing sector and salaried individuals to ease their burden.

He added that international credit agencies had shown alignment in their assessment of Pakistan, signalling improving investor confidence.

Aurangzeb, however, noted the absence of major corporate players at the expo and encouraged their active engagement in shaping the country’s economic future.

Published in Dawn, August 19th, 2025