Finance Minister Muhammad Aurangzeb announced on Thursday that the military’s pension structure will undergo a complete overhaul, with new pension regulations to be implemented within one year.
He made this announcement during a meeting of the National Assembly’s Finance Committee, chaired by Syed Naveed Qamar.
Aurangzeb emphasised the need for comprehensive changes due to the unique nature of the military’s pension system. He highlighted the significant financial burden of pensions on the national treasury, noting that Rs1 trillion is spent annually. To address this, the government plans to introduce new schemes in the budget, including a voluntary pension scheme for new employees.
During the meeting, Aurangzeb briefed the committee on ongoing negotiations with the International Monetary Fund (IMF). He said positive trends in macroeconomic indicators from the previous fiscal year and a decrease in inflation.
He also discussed the stabilisation of the forex market and the goal to increase the tax-to-GDP ratio to 13%, aligning with IMF recommendations. The minister expressed gratitude to provincial finance ministers for supporting agricultural income tax and stressed the importance of broadening the tax base.
The minister acknowledged difficulties faced in 2023 when the IMF program was suspended, particularly regarding the repatriation of profits by investors. However, he noted significant improvements since then.
Aurangzeb highlighted a $400 million loan from the International Finance Corporation (IFC) to PTCL and assured that there are no longer import restrictions or pressure to artificially suppress any commodities.
The finance minister mentioned efforts to increase public trust in the Federal Board of Revenue (FBR), citing Rs60 billion in additional refunds issued last fiscal year. He suggested promoting public-private partnerships for development budgets and reiterated the introduction of austerity measures to reduce government expenses, including the dissolution of five ministries and the shutdown of the Public Works Department due to financial losses.
