It won't be last IMF programme, if tax collection isn't improved: Aurangzeb
Business
Says he empathises with the pain people will feel because of the budget
ISLAMABAD (Web Desk) – Finance Minister Muhammad Aurangzeb has warned that the IMF programme won’t be the last one for Pakistan if the government failed to significantly boost tax revenue, as he was hopeful of reaching a deal with the Washington-based lender.
In an interview to the Financial Times, Aurangzeb said he was “relatively confident” of reaching a staff-level agreement with the IMF this month, as Islamabad is eyeing at bailout package ranging between $6 billion and $8 billion.
“But it will not be our last fund programme if we don’t bring our tax revenues up,” the finance minister said, as he has announced a budget which meets the IMF conditions while generating severe backlash from the low-income groups and salaried classes.
In this connection, he said, “I empathise with the pain people will feel, I was one of the highest taxpayers, at least in the banking sector,” he added.
“We do not have five years for our programme,” Aurangzeb said. “We have to start showing, start delivering, in the next two to three months.”
“The direction of travel is positive, and investors are showing confidence in the stock market,” said Aurangzeb who was referring to the KSE-100 index, which is one of Asia’s best-performing year to date.
Still, the government faces a considerable challenge in putting Pakistan on the path for longer-term growth and debt sustainability, he said.
The finance minister said the country remained reliant on imports, forcing Islamabad to borrow to pay off existing and accumulating debts.
“We need to create the capacity to repay” loans, Aurangzeb said. “As long as this economy stays import-based, what happens is the moment it heats up, we run out of dollars [and] we have to go back to the lender of last resort on our knees.”
“It’s about time we get real,” Aurangzeb said, pointing to Gulf investors’ demands of equity and board seats. “The ball is in our court to provide bankable, investable projects.”
The finance minister also slammed a reputation for corruption at the Federal Board of Revenue (FBR).
“People don’t want to deal with the tax authority because of corruption, because of harassment, because of people asking for speed money, facilitation money,” Aurangzeb said. “That’s not sustainable.”
