“Pakistan’s Economy is in Good Hands,” Says Finance Minister

During a lengthy two-and-a-half-hour meeting, Caretaker Federal Minister for Finance, Dr. Shamshad Akhtar, provided reassurances to the Pakistan Business Council (PBC) regarding the interim government’s efforts to curb smuggling and bridge the gap between inter-bank and open market exchange rates, with the aim of achieving economic stability.

The PBC commended the government’s determination in addressing energy and fuel pricing issues to uphold the IMF Stand-By Agreement. However, they emphasized the need for the next IMF program to focus more on reforms that expand the tax base and rectify fundamental flaws in the energy sector. Additionally, the council expressed appreciation for Dr. Akhtar’s initiatives to enhance governance and accountability within state-owned enterprises.

The meeting was attended by Malik Amjed Zubair Tiwana, Chairman of the Federal Board of Revenue (FBR), and his team, who collaborated with the PBC to voice concerns such as the disproportionate tax burden on the formal sector, disparities in tax rates between corporate and unincorporated businesses, the imposition of minimum tax on turnover during tax holidays and on listed companies, high taxation on salaried employees, and inconsistencies in the taxation of inter-corporate dividends.

Dr. Akhtar pledged to facilitate focused discussions on these matters with the FBR. She also outlined plans to establish an independent Tax Policy Unit, separate from the FBR, and seek input from the Fiscal Affairs Department of the IMF to address the concerns highlighted by the PBC.

Furthermore, the PBC urged the Finance Minister, in her capacity as the Chair of the Cabinet Committee on Economic Revival, to support competitive pricing of power for the industrial sector. This move is aimed at fostering job creation, promoting exports, reducing reliance on imports, increasing tax revenue, and managing surplus generation capacity, particularly during the winter season.

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