By ensuring that Pakistan’s obligations to the International Monetary Foundation will be maintained, Finance Minister Muhammad Aurangzeb said the government will not impose additional taxes to cover the income deficit.
Aurangzeb, who spoke to journalists in Islamabad on Wednesday, emphasized that Pakistan remains obliged to raise his tax-to-BNP relationship to 11 percent during the current financial year in line with IMF goals.
He said ongoing litigation on tax tests in the courts represents a potential source of income once resolved, which would help narrow fiscal policy.
“The income deficit will not be fulfilled through new taxes,” the minister said, adding that progress with the IMF has been constructive and discussions remain positive.
Aurangzeb reiterated that the government is determined to achieve the agreed tax-to-BDP goal and expressed confidence that reforms combined with dispute resolution will stabilize income streams.
FBR to focus on tax collection
Earlier, Aurangzeb Senate’s Standing Committee on Funding said that the upcoming federal budget will not be prepared by FBR, but instead of a newly established tax policy board of the Ministry of Finance.
The minister said the new board will focus on political formulation, while FBR will limit itself to tax collection.
He added that macroeconomic stability is beginning to reflect in Pakistan’s economic indicators with reference to the recent refund of a $ 500 million eurobond and plans to issue a Panda bond at the end of November.
Aurangzeb emphasized that the tax policy board will work year -round to participate in continuous budget consultations, as opposed to the previous practice of hasty considerations only weeks before the budget presentation.
An advisory board consisting of experts and representatives of the private sector will also be established, although its recommendations will not be binding.
Senators criticize FBR -Practice
During the session, committee members raised concerns about FBR’s behavior. A senator criticized his strong approach to dealers and noted: “Tax collection has not finished a Kalashnikov. Treat dealers as dealers, not as a Taliban or terrorists.”
A lawyer representing a disturbed citizen claimed that FBR had violated presidential directives by challenging federal Ombudsman’s decisions in court. He argued that ministries and departments under the Ombudsman’s Reforms 2013 are obliged to implement presidential orders.
However, the Riks Advokaten maintained that product classification issues fall outside the federal tax Ombudsman’s jurisdiction and should be dealt with by the relevant classification committees.
Senator Agnan accused the FBR of filing politically motivated cases against him and claimed that the authority had previously filed false charges, which he successfully contested.
Inland Revenue Operations Member Hamid Ateeq Sarwar advised the senator to pursue appeals through proper legal channels and ensure that decisions made by appeal forums would be respected.
Other discussed questions
The Minister also addressed questions about the Bill on virtual assets and confirmed that the Ministry of Finance had received 16 inquiries from the committee and would answer detailed. He said the bill should promote economic growth rather than to create fear.
Senator Dilawar, a tobacco manufacturer, complained that despite a bumper crop this year, buyers were unwilling to buy tobacco even for RS300 per day. Kg. Aurangzeb replied that irregularities in sectors such as tobacco, beverages and sugar must be treated transparently.
Committee members welcomed the separation of tax policy from FBR and called it a long time for reform. They urged the government to ensure that the new board remains active and effective in decision making.
