Budget features bold measures for ‘strategic direction’...

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Budget features bold measures for ‘strategic direction’...

• Finance minister hints at simplified tax returns for salaried class
• Claims every possible support to be made available for armed forces
• Privatization drive to be ‘accelerated’ in next fiscal year; PIA, three Discos to be privatized by year end
• Flags population growth, climate change as existential threats

ISLAMABAD: Promising simplified tax returns for the salaried class, Finance Minister Muhammad Aura­ng­zeb on Monday pledged that the up­co­ming federal budget would int­ro­duce “bold measures” to steer the national economy in a strategic direction and make available whatever support is required by the armed forces.

Talking to journalists after an event organized by the Pakistan Banks Association and Karandaaz Pakistan, the finance minister said that every possible support would be provided to the armed forces, stressing that it was a national need in light of recent cross-border aggression, not just a military requirement.

Responding to a question, he said the IMF mission and its regional dir­e­ctor, Jihad Azoury, and executive dir­ector, Bahador Bijani, had retur­ned after concluding the mission in Islam­abad and completing discussions on the broad contours of the budget.

The discussions would continue virtually this week on a few new things that might crop up from Pakistan’s side or from their side, but a lot of support was available from the IMF, he said.

Responding to a question on budget delay, the minister said the country’s leadership had prioritized expressing gratitude to friendly nations who stood by Pakistan amid heightened tensions with India. Budget finalization would resume upon the leadership’s return.

Mr Aurangzeb said the IMF app­roved Pakistan’s first biannual rev­iew and additional financing strictly on merit because all structural and qualitative benchmarks had been completed. He noted that Pakistan’s resolve to stay the course played a key role in overcoming challenges, including attempts to derail the IMF board meeting and create problems.

He said the government would ensure simplified tax returns and forms for the salaried class. He said that around 70 to 80 per cent of salaried people did not hold equity and fixed-income portfolios.

“They receive salaries through bank accounts with tax deducted at source. They should not have to fill in 140-150 data points,” he said, adding that the government aimed to reduce that number to just nine — five for wealth tax and four for income tax.

The minister conceded that 24 state-owned enterprises transferred to the Privatization Commission last year did not go well. However, he said the process would now be accelerated, with transactions involving Pakistan International Airlines (PIA), three power distribution companies and some financial institutions expected to reach completion by the end of this year.

Mr Aurangzeb said debt servicing was the single-largest expenditure on the public finance side, and therefore, the government would have to ensure fiscal discipline to reduce borrowing and thus curtail debt servicing costs.

While the Debt Management Office is being restructured, he emphasized that its goal should go beyond reducing interest payments and instead help create economic value — or “alpha” — to put the economy on a sustainable growth path.

However, he warned that population growth and climate change were existential threats already impacting the country. Therefore, the government was also engaged with development partners and the IMF to support adaptation policies, he added.

Published in Dawn, May 27th, 2025