Finance Minister Muhammad Aurangzeb emphasized on Sunday that Pakistan’s economy requires fundamental changes to ensure that the latest International Monetary Fund (IMF) agreement will be the country’s last. He called for a “nuclear war” against the cash-based economy as part of a broader reform agenda.
During a press conference in Islamabad, where the Federal Board of Revenue (FBR) chairman was also present, Aurangzeb outlined the country’s fiscal challenges and the government’s efforts to address them. He noted that the newly negotiated IMF deal brings positive news for Pakistan, but the country’s economic stability remains at risk unless substantial reforms across multiple sectors are enacted.
Aurangzeb stressed the need to overhaul the tax system, particularly targeting the cash economy, and ensure better documentation. He highlighted that the IMF Executive Board had approved a 37-month, $7 billion Extended Fund Facility for Pakistan, following an agreement reached in July. The minister also credited the current account surplus to strong remittances and other encouraging economic indicators.
He pointed out that without significant economic adjustments, Pakistan risks repeatedly needing IMF bailouts. Reforms in tax auditing are critical, according to Aurangzeb, who announced plans to hire 2,000 chartered accountants to strengthen the FBR’s auditing capacity. Additionally, he assured that a new monitoring system would be developed to prevent taxpayer harassment by auditors.
The minister addressed the issue of under-filing and the need for a more structured approach to tax collection. He also reassured international investors that the government had begun clearing blocked dividends and profits, which had been a point of concern for foreign stakeholders.
Aurangzeb noted the decrease in inflation and policy rates, advising industries to focus on the falling Kibor (Karachi Interbank Offered Rate) as an indicator of improving conditions. However, he warned that without systemic reforms, Pakistan would continue to rely on taxes from the salaried class and manufacturing sector.
