The country is run by taxes, not donations: Aurangzeb

KAMALIA:

Pakistan’s Finance Minister Muhammad Aurangzeb has stressed the need to “privatize” key sectors of the country.

Speaking to the media in Kamalia, Punjab, Aurangzeb stressed the urgent need to address the unsustainable losses incurred by state-owned enterprises, which are a burden disproportionately borne by society.

Highlighting an astonishing example, the minister revealed that Pakistan International Airlines (PIA) itself suffered losses of Rs. 622 billion recently acquired by the government.

He added that in the future, the administration plans to initiate airport outsourcing, a strategic move aimed at stimulating economic growth by leveraging the efficiency of the private sector.

“For our nation to thrive,” the minister said, “we must entrust critical sectors to the private sector.” Recognizing the need for immediate relief measures, he reiterated the government’s commitment to take full responsibility for mitigating losses and creating conditions conducive to sustainable economic progress.

Saying that “countries live on taxes, not charities”, he also highlighted the persistent problem of tax evasion, noting that many individuals and businesses avoid FBR audits due to concerns over harassment.

The FM also stressed that the country’s current tax-to-GDP ratio of 9.5% is not sustainable. While education, universities and hospitals can be maintained through donations, the country can only function thanks to taxes, he said.

The minister emphasized that it is necessary to increase the tax to GDP ratio to 13.5%.

“Our first approach is to include all sectors that were previously excluded from direct taxes and secondly, to phase out the tax exemption of Rs 39 trillion.”

“We are also including all other sectors in the tax net,” he said, adding: “32,000 retailers have already registered and taxes will be imposed on them from July. There is no class or sector that can remain outside the scope of direct taxation.”

Highlighting the track and trace system, which was initially expected to start with the tobacco industry and expand to sectors such as sugar, fertilizers and cement, he lamented its delayed implementation, which resulted in unrealized revenue expectations.

The Ministry of Finance emphasized that digitization and automation in FBR will play a key role in curbing corruption.

Aurangzeb highlighted concerns over people’s reluctance to come into the FBR tax net due to perceived harassment and issuance of notices.

He noted: “People come to me personally with complaints. Having worked in the private sector myself, I understand these issues.” However, he emphasized that avoiding tax obligations for these reasons is not justified.

The Ministry of Finance also responded to the criticism of the government’s spending, admitting that the government had not reduced spending.

However, he stressed that Prime Minister Shehbaz Sharif had announced the closure of the PWD, thereby saving approximately 3.5-4 billion rupees, which is a relatively small sum in budgetary terms, but crucial for the projects implemented under its supervision.

The committee will then propose next month to close and merge ministries to effectively reduce spending.