• Aurangzeb seeks proposals from business community to mitigate impact of tariff war
• Claims hundreds of ‘corrupt’ attached departments of ministries burden on exchequer
• Admits benefits of low inflation yet to reach masses
LAHORE: Finance Minister Muhammad Aurangzeb has urged the business community to share ideas and proposals to enable the government in ending trade deficit with the United States in light of duties imposed by the Trump administration.
“There is a relief in US tariff for 90 days. But the 10pc base tariff has already been enforced. Though this issue [imposition of tariff] exists at the moment, the real issue is the trade imbalance which needs to be resolved with your [business community’s] views, suggestions and ideas,” the minister said while speaking at the Lahore Chamber of Commerce & Industry (LCCI) on Saturday.
“By seeing our exports, now we will have to increase our imports too. As you say we may import wheat and other items to end the trade imbalance. For this, I would request you to give us your ideas and proposals about how to increase our exports and more importantly the imports from America for this purpose,” he said, adding that since the US is Pakistan’s largest trading partner, the business community should come forward and help government face these challenges professionally.
Mr Aurangzeb said the government would be sending a high-power delegation to the US for having constructive engagements with the relevant authorities there in this regard. The delegation would have representation from the business community as well, he assured.
SOEs privatisation
Talking about privatisation of the state-owned enterprises (SOEs), the minister said as many as 24 SOEs have been handed over to the privatisation commission. Similarly, a committee headed by him is also looking into the affairs related to rightsizing of the ministries and their attached departments.
“About this, I want to tell you that the problems don’t exist in the ministries, but their over 400 attached departments that are costing the exchequer heavily due to corruption, leakage (of money),” he said, adding that the committee was reviewing all attached departments very closely.
“But surprisingly when we see their (attached departments) presentations, we are told a lot of work is being done by them. But then I ask them that since you didn’t do anything in the last 50 years, how you can perform in future,” the minister quipped.
About crops, the finance minister strongly recommended to go for deregulation of prices rather than fixing support price or procurement.
Mr Aurangzeb believed that the IT and mineral sectors would be a game changer for Pakistan’s economy, as the recent conference on minerals remained very successful in this regard.
He said only nickel became a major export driver for Singapore, with a $22 billion share in exports. Copper has the potential to yield similar dividends for Pakistan, he said, adding that global interest in Pakistan’s mineral sector and IT potential was growing, and the government was focused on removing all barriers to attract and facilitate both local and foreign investment in these sectors.
The industrial growth was only possible if financing costs, power tariffs was reduced and taxation policies were improved, he said, adding under Prime Minister Shehbaz Sharif’s leadership, the economic direction of the country was being steered with clear goals and results would soon be visible.
The minister said that hurdles in profit repatriation for foreign investors had been addressed, which boosted their confidence in the Pakistani market. “We are ensuring that the benefits of reduced inflation directly reach the common man. Middlemen will not be allowed to exploit the system,” he said.
While talking about taxation, he admitted that the salaried class was bearing the tax burden, as income tax was being deducted at the source. “We intend to offer relief to the salaried segment,” he assured. He was of the view that if the tax-to-GDP ratio increased to 13 per cent, the government could offer broader relief to various sectors.
LCCI President Mian Abuzar Shad praised the government’s efforts in curbing inflation and reducing the policy rate.
He urged the government to ensure timely disbursement of tax refunds, particularly to exporters, to support liquidity, stimulate investment, and maintain momentum in economic activity.
He pointed out that the FBR often delayed refunds for up to a month, despite the 72-hour processing requirement under the FASTER system.
“If refunds are not released within 15 days, the FBR should pay exporters with a markup,” the minister suggested.
