LAHORE: Finance Minister Senator Muhammad Aurangzeb on Saturday ruled out the possibility of a mini budget, asserting that any revenue shortfalls would be bridged through improved tax compliance and more effective budget management rather than additional fiscal measures.
Addressing an interactive session organised by the Lahore Chamber of Commerce & Industry (LCCI) at a local hotel, the minister disclosed that the upcoming federal budget would be formulated by the Tax Policy Wing of the Ministry of Finance. He added that the role of Federal Board of Revenue (FBR) would be confined strictly to tax collection.
Nearly 50 chambers of commerce participated in the session. Expressing dissatisfaction with the performance of FBR, Senator Aurangzeb indicated that a decision regarding the future course of action for the department would be taken soon.
The minister said PASSCO had been closed because it had gone corrupt to the core. He said in order to provide a level playing field and on demand of the business community, the federal government had increased the sales tax in FATA and PATA from 10 to 18 per cent. He said the government resisted pressure from the tobacco sector and withdrew all undue concessions because only 2 tobacco companies out of over 10 were operating formally.
He said the economy is in a better shape. The Large Scale Manufacturing registered a growth of 4 per cent. The government is set to privatise the PIA on 23rd of this month. More companies are in line to be privatised, including a bank and three power distribution companies, which would be followed by three more distribution companies. Crypto Council has been established and licences have been issued to two companies to facilitate 25 million youth that are active in crypto currency.
Aurangzeb said the federal government increased its expenses this fiscal by only two per cent against a traditional yearly increase of 10pc. Allocations have only been increased for the defence budget and Benazir Income Support Programme. He said austerity had a salutary impact on debt servicing. The policy rate had come down to 11 from 24 per cent a year back. He hoped that if inflation remained stable at current level, policy rate might be reduced to a single digit. He said all sectors would have to contribute towards exports. He said he had asked the auto sector to ensure that at least three per cent of their production goes towards exports.
The minister said the government had received $1.2 billion from the IMF that had recommended 15 measures that Pakistan should implement for better governance. He said senior bureaucrats have been asked to declare their income and assets, which will be placed on the government website. This, he added, is not one of the IMF’s recommendations.
He stressed the government was committed to strengthening economic stability and driving export-led growth — noting that policies are aimed at creating a more competitive and resilient economy for businesses. He reiterated the government’s commitment to maintaining overall economic stability and pushing for investment- and export-driven growth as core priorities.
Aurangzeb typically urged stronger partnership with the private sector, highlighting that business ideas and proposals were needed to address economic challenges and boost trade and investment. He stressed that strengthening the economy required active collaboration with the business community and that policies should support enterprise, competitiveness and productivity.
He mentioned efforts to ease inflationary pressures, reduce policy interest rates and monitor prices of essentials to offer relief to consumers and businesses. He asked business leaders to support and engage with structural reforms — especially in taxation, exports, and ease of doing business — to ensure long-term sustainable growth.
He underscored the importance of expanding the tax base, improving digitization of the revenue system and structural reforms to support fiscal sustainability and fairer taxation. He stressed on trade diversification, expanding export sectors (e.g., IT services) and engaging trade groups to help address trade imbalances.
The LCCI president presented a charter of demand to the finance minister on behalf of all other chambers of the country.
