Pension is a huge burden on government, says Muhammad Aurangzeb.
Muhammad Aurangzeb, Federal Minister for Finance, has said that pensions for retired employees is a considerable burden on the government during a speech to industrialists and business leaders at the Federation of Pakistan Chambers of Commerce & Industry (FPCCI) on Saturday.
Aurangzeb maintained that the decision to decline salaries by federal cabinet has not significantly eased the treasury’s financial pressures.
He said that that meaningful expenditure reductions would come from closure of inefficient government departments.
The minister revealed plans to lower the policy rate this year.
He said that its easy to make big speeches is easy but implementation is hard.
Also read: What is new pension fund, Approved by ECC
He further said that the government is hoping to raise the tax-to-GDP ratio to 13% over the next two to three years.
Addressing concerns from small business owners about new taxes, he said that these measures were necessary as many small businesses had previously not been taxed.
Aurangzeb assured that tax authorities have detailed data on non-filers and advised industrialists to avoid dealing with Federal Board of Revenue (FBR) officials.
🇵🇰 Pakistan’s tax-to-GDP ratio will be increased to 13-14 percent in the next four years but pensions remain a ‘big liability’ and massive reforms are needed to overcome this burden, Finance Minister Muhammad Aurangzeb.
— Asad Nasir (@asadnasir2000) May 10, 2024
Aurangzeb highlighted the caretaker government’s continuous support for various initiatives despite the difficult economic decisions impacting the industry
He promised to consider businessmen’s recommendations regarding the budget.
On the issue of Independent Power Producers (IPPs), Aurangzeb criticized the previous PTI government for inadequate efforts and expressed a commitment to resolving the issue.
He also noted that 60% of the total tax revenue is allocated to the provinces and mentioned that taxes on farmhouses and large houses are being imposed in coordination with provincial governments.
