People will have to pay taxes: Aurangzeb

ISLAMABAD: Finance Minister Muhammad Aurengzeb on Tuesday informed the National Assembly that there was no option except going for structural reforms, adding that Pakistan could not go ahead with nine percent tax-to-GDP ratio.

Speaking on a resolution regarding country’s economic situation, the minister said: “People will have to pay taxes. I will request parliament to extend its support to the government for increase in tax revenue and improve energy equation.” He said that the ongoing fiscal year would wrap up with foreign exchange reserves between $9 to 10 billion, equivalent to imports for two months.

The finance minister said that foreign exchange reserves currently stand at $8 billion, while Pakistan would also receive $1.1 billion IMF tranche. He pointed out when the incumbent government assumed office, the country had foreign exchange reserves of $3.4 billion, covering imports of only 15 days. “After making payment of Eurobond with interest, now we have foreign exchange reserves of $8 billion.”

He mentioned that a 74 percent decrease in the current account deficit had been witnessed, which reached $1 billion as compared to $3.9 billion previously. “We are in a much better position and there are many surpluses as far our fiscal situation is concerned, and the current account deficit has been converted into surplus,” he said. He said that the country could no longer bear losses being incurred by state owned enterprises (SOEs). There are 70 to 80 enterprises that are incurring 90 percent of total losses by the SOEs.

He said that towards June and July, the inflation was 38 percent which now, according to State Bank of Pakistan, is 20.7 percent. “It has been stated by the SBP that inflation will come down to five to seven percent,” he said. He also pointed out that Pakistan’s friendly countries and international financial institutions wanted success of country’s economy. “During my stay in Washington, I met officials of IMF, World Bank, IFC, ADB and my counterparts from the UAE, Turkiye, China and Saudi Arabia, and all of them want success of Pakistan’s economy,” he said.

The finance minister said that he wanted to tell parliament that there is a lot of support for Pakistan inside and outside the country and there was a feeling that the country should come out of problems. He said the agriculture and information technology sectors hold the potential to contribute significantly to the country’s economic growth.

The importance of promoting agricultural growth is to achieve a rate of five to six percent annually in addition to harnessing the potential of local livestock sector. He highlighted the significant growth experienced in the agricultural sector due to successful bumper crop harvests, which promised a positive impact on the industrial sector.

He said the positive performance of Pakistan Stock Exchange (PSX) in recent days attributed it to the sentiments that investors’ confidence in the market was restored.

Opposition Leader Omar Ayub Khan said the country’s economy could not improve unless there is an increase in Foreign Direct Investment (FDI). “How the FDI will improve when a former prime minister is prisoned in three fictitious cases and other leaders, including myself, are facing many fake cases,” he said.

Earlier, MQM’s Syed Mustafa Kamal and PTI’s Ali Muhammad Khan during their speeches called upon the government to get rid of interest-based economy and banking as also mentioned in the Constitution of Pakistan.

The finance minister said that the Federal Shariat Court had also issued a verdict in this connection giving five-year timeframe to shift of Islamic banking system. He said that many conventional branches of banks have converted to Islamic banking.

Barrister Gohar, a PTI-backed member, on a point of order, opposed the trial of civilians in military courts. He said that 21 civilians who were convicted with regard to May 9 incidents were released before Eid day while over 80 civilians are still in military custody. He said that he came to know that one of civilians in military custody attempted to commit suicide.

Meanwhile, responding to a calling attention notice, Minister for Law and Justice Azam Nazeer Tarar said the government remained resolute in not relinquishing its water rights, emphasising that any alteration to the Indus Waters Treaty necessitated mutual consent from both Pakistan and India. He underscored India’s attempts to violate the agreement, highlighting the World Bank’s role as a signatory committed to upholding its integrity.

He reiterated Pakistan’s consistent stance against Indian transgressions, asserting that Pakistan vigorously contests any violations through appropriate channels, assuring that Pakistan would take necessary means to safeguard its rights.

Muhammad Ahmed Chattha, a PTI-backed member, alleged that presiding officers were forced to poll 50,000 fake votes during the by-elections in the Punjab Assembly constituency seat left by him in Wazirabad, saying that female polling agents were dragged out of the polling stations.

PMLN MNA Shamaila Rana reminded the PTI parliamentarian that during the PTI regime, she was also baton-charged outside a prison when a daughter (Maryam Nawaz) was arrested in front of her father.