KEY POINTS
- Finance Minister details wide-ranging reforms to strengthen economic stability.
- Focus areas include taxation, digitalisation, state-owned enterprise restructuring, debt management, and investment facilitation.
- The Export Development Surcharge (EDS) was abolished to boost exports and improve competitiveness.
- Positive investor sentiment and multinational interest signal improving confidence in Pakistan’s economy.
ISLAMABAD: Pakistan’s Finance Minister Muhammad Aurangzeb on Wednesday presented a detailed, home-grown Reform Agenda at the Pakistan Business Council’s Dialogue on the Pakistan Economy.
The initiative aims to strengthen economic stability, enhance competitiveness, and restore fiscal balance across key sectors.
Aurangzeb highlighted progress on macroeconomic stability, citing early signs of recovery in industries such as cement, fertiliser, automobiles, mobile phones, and large-scale manufacturing.
He noted improvements in investor sentiment, referencing a recent OICCI survey that shows increased recommendations for Pakistan as a destination for foreign direct investment.
The Finance Minister outlined structural reforms in taxation, with policy now shifting from the Federal Board of Revenue (FBR) to the Ministry of Finance, including the establishment of a Tax Policy Office and an Advisory Council.
Digitalisation of taxation, continuous engagement with chambers and sectoral bodies, and year-round policy review are central to the reforms.
State-owned enterprise restructuring has led to right-sizing half of federal ministries and departments, abolishing 54,000 vacant posts and generating annual savings of Rs. 56 billion.
Reforms are also underway in debt management, extending average time-to-maturity, lowering refinancing risks, and controlling debt servicing costs.
The new contributory pension scheme has enrolled over 9,000 government employees, alongside measures to reduce fiscal pressure from pension liabilities.
Aurangzeb also highlighted the Digital Pakistan initiative, emphasising digital payments, public infrastructure, and transparency in government processes.
Upcoming priorities include the inaugural session of the 11th NFC Award, Pakistan’s first Panda Bond issuance before the Chinese New Year, and the operationalisation of the Pakistan Virtual Asset Regulatory Authority to formalise crypto-related activities.
On exports, the Finance Minister confirmed the abolition of the 0.25% Export Development Surcharge (EDS), as a measure of relief for exporters and to enhance Pakistan’s global competitiveness.
He noted the increasing engagement of multinational corporations, including Google, with plans to establish technical and export hubs in Pakistan.
The Minister projected Pakistan’s growth at around 3.5% this year, with potential to reach 4% over the next two to three years and up to 6–7% over the medium term, provided momentum in agriculture, manufacturing, and services is maintained.
