Finance Minister Muhammad Aurangzeb warned that the government may have to introduce additional taxes worth Rs400 billion to Rs500 billion if the National Assembly does not pass legislation to ban economic transactions by ineligible persons. This follows his recent proposals for Rs432 billion in new taxes, which focus on sectors like the digital economy, solar panels, and fuel.
Addressing a post-budget press briefing, Aurangzeb stressed that all budget figures have been locked with the International Monetary Fund (IMF), and further steps would be needed to meet revenue targets.Â
The finance minister explained that the government’s proposed restrictions include bans on booking, purchasing, or registering motor vehicles, registering or transferring immovable property, and selling securities for those deemed ineligible based on their financial resources. Only individuals with assets worth 130% of the purchase value in cash or equivalent assets would be eligible for such transactions.
“If the law to ban economic transactions is not passed and the enforcement measures are not implemented, we will have to impose Rs400 billion to Rs500 billion worth of new taxes,” Aurangzeb said. He emphasized that the International Monetary Fund (IMF) has agreed with the government’s stance on raising Rs389 billion through enforcement measures, which require new legislation.
The briefing, which was briefly interrupted by a walkout from independent journalists protesting the lack of a traditional technical briefing on the Finance Bill, continued with Aurangzeb, accompanied by Federal Board of Revenue (FBR) Chairman Rashid Mehmood Langrial and Secretary Finance. Following an apology from the Information Minister Ataullah Tarar, the press conference resumed.
Aurangzeb highlighted that the federal government had managed to generate over Rs400 billion in additional revenues this fiscal year through enhanced enforcement measures. He projected that the tax-to-GDP ratio would rise to 10.4% this year and to 10.9% in FY2025-26. However, he stressed that if the tax reforms and enforcement measures do not succeed, additional measures totaling Rs400-500 billion would be necessary to meet the targets.
The minister also discussed the tax system’s impact on various sectors, including the salaried class. He acknowledged the concerns of those affected by the tax burden but emphasised that the government had provided as much relief as fiscal constraints would allow. Regarding a proposed surcharge on electricity bills, FBR Chairman clarified that no additional surcharge had been imposed at this time.
Addressing concerns about the potential delinking of population data from the National Finance Commission (NFC) award, Aurangzeb assured that all changes would be made in consultation with the provinces, and confirmed that provinces are projected to receive a record Rs8.2 trillion from the federal divisible pool for FY2025-26.
Aurangzeb also outlined the government’s tariff rationalization plan, including the removal of additional customs duties on 4,000 tariff lines and reductions on 2,700 lines, which would primarily benefit raw materials and intermediary goods for exporters. This reform is part of a broader strategy to simplify Pakistan’s tariff system, with the ultimate goal of supporting industrial growth and integrating Pakistan’s economy into global supply chains.
On another note, the finance minister defended the decision to keep the minimum wage unchanged at Rs37,000 per month, explaining that it was a well-considered decision. He invited feedback from industries but expressed confidence in the decision. However, he also advocated for an increase in parliamentarians’ salaries, justifying the substantial hike for the Senate chairman and deputy chairman, and the National Assembly speaker and deputy speaker, whose salaries were raised sixfold to Rs1.3 million per month.
