ISLAMABAD: Finance Minister Muhammad Aurangzeb announced that the government will meet with business community leaders on July 15 to clarify the reasons for the recent tax-related amendments. In his address to the Overseas Investors Chamber of Commerce and Industry (OICCI) on Monday, Aurangzeb emphasized that the government intends to engage in constructive dialogue, not pressure, and explain the rationale behind the tax changes.
This announcement comes as chambers of commerce and trade associations plan a nationwide strike on July 19 in response to the new tax reforms. Business leaders have been invited to Islamabad for discussions on the proposed changes, including the retail tax and other fiscal matters.
Aurangzeb assured the media that Pakistan’s fiscal situation had improved, with a reduction in the government’s borrowing needs. He also highlighted that debt buybacks had enhanced liquidity in the banking sector, allowing more private sector lending.
The finance minister emphasized the importance of banks supporting the government’s privatization and restructuring efforts and working to revive underperforming businesses. He also pointed to a positive trend in business confidence, referencing a recent survey by OICCI.
The government, Aurangzeb noted, had successfully repatriated around $2.3 billion in dividends and profits during the last fiscal year. He also mentioned ongoing structural reforms at the Federal Board of Revenue (FBR) and said the new sales tax law includes safeguards to prevent tax evasion.
In an effort to simplify tax filing, the government has introduced an electronic income tax return form and is seeking recommendations from stakeholders to improve the process. Aurangzeb also discussed tax relief for the salaried class, stating the government aims to further reduce taxes in the future.
Regarding exports, Aurangzeb informed that Rs75 billion in sales tax refunds had been issued to exporters this month. He also mentioned that the government is monitoring commodity prices monthly and urged sectors such as real estate, agriculture, and wholesale to contribute more to the GDP. Additionally, he praised the pharma sector for its recent performance.
Additionally, Finance Minister Muhammad Aurangzeb addressed a press conference in Karachi, clarifying that the Federal Board of Revenue’s (FBR) expanded enforcement powers pertain strictly to sales tax fraud — not income tax.
He explained that under existing laws, Inland Revenue officers already had the authority to arrest in cases of tax fraud. The new amendments, he stressed, include safeguards such as a Rs50 million fraud threshold, approval by a three-member FBR board, and oversight at the commissioner level.
“This is not something Parliament approved without thinking it through. A lot of thought has gone into it,” Aurangzeb said, adding that six of the 10–12 new sections deal specifically with sales tax fraud due to its serious nature.
He emphasized the government’s commitment to rebuilding public trust in the tax authority, citing the launch of a new, simplified electronic tax return form for salaried individuals, which reduces the earlier 800-row format to just eight screens. The same simplification will soon extend to small traders and SMEs.
Aurangzeb also urged banks to actively support privatisation and revival of 24 sick state-owned enterprises, calling it a key component of the government’s industrial policy. “Banks can play a very important role in this — and they should,” he noted.
Reiterating the importance of restoring investor confidence, Aurangzeb highlighted the repatriation of $2.3 billion in dividends and profits over the last fiscal year and improvements in letter of credit access and liquidity.
“If existing investors are not satisfied, bringing new investment is very difficult. We’ve come a long way,” he said, calling these steps basic investment “hygiene.”
He further revealed that Rs75 billion in sales tax refunds had already been processed this month and reaffirmed the government’s focus on sustainable, deregulated growth, warning against short-term, consumption-led booms.
“My personal opinion is that wherever things can be deregulated, we should. Let demand and supply work,” he concluded.
