Finance Minister Muhammad Aurangzeb on Sunday claimed he was “very optimistic” about securing a new bailout from the International Monetary Fund (IMF) following President Asif Ali Zardari’s approval of the tax-laden budget for fiscal year 2024-25.
“The IMF program is our assurance in terms of macro stability,” he told a press conference in Islamabad. “We are taking it forward; it is inevitable. I’m very optimistic that we’ll be able to take it through the finish line for an Extended Fund Program, which is going to be larger and longer in nature,” he added.
The approved budget has attracted much criticism over revised tax rates for the middle and upper middle classes of society, particularly the salaried class, as well as its imposition of new taxes on real estate transactions and a plan to boost the existing petroleum development levy by Rs. 10/liter. The budgetary impact is projected to prove inflationary, with observers sounding the alarm over the government’s actions reversing the gains secured by the government in recent months.
“I completely understand the stress that people from different sectors feel about additional taxes,” maintained Aurangzeb. “I completely empathize and sympathize, but we need to work for it,” he said, claiming the government would strive to reduce the impact on the common man and businesses by curbing leakages and improving the management system.
During his press conference, the minister sought to dismiss criticisms over the perceived failure of the budget to expand the tax net, maintaining new sectors would be taxed. “I’m repeating myself: When Miftah [Ismail] proposed taxing retailers in 2022, it should have been implemented. We cannot have any segment that is not contributing to society and the exchequer,” he said and thanked 42,000 new retailers for voluntarily registering themselves for taxation from July
“There should be no confusion that we aren’t roping in new sectors,” he stressed. “The same goes for the real estate sector. Previously, the demand side was taxed and now the supply side’s income will also be taxed,” he said, adding the concept of non-filers must be eradicated. “In this particular budget, we have taken it to the punitive level so as to make the non-filers realize that they [have to file returns],” he said.
On the revised PDL, the finance minister said the additional Rs. 10/liter would not be imposed immediately. “There are talks about the PDL. I want to be very clear: the Rs. 70 limit that we’ve set, we’re not going to impose it [right now],” he said. “This is a ceiling. In my first budget speech, I had set it at Rs. 80, which was later revised to Rs. 70 and it will not be imposed; it’ll be kept as a headroom,” he claimed.