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During a recent press briefing, Finance Minister Muhammad Aurangzeb unveiled ambitious plans to boost Pakistan’s tax-to-GDP ratio to 13-14 percent over the next four years. However, he underscored the pressing issue of pensions, labeling them as a significant liability that demands urgent reform.
Joined by Information Minister Attaullah Tarar and Law Minister Azam Nazir Tarar, Aurangzeb hinted at the government’s strategy to tackle pension costs, suggesting potential adjustments in retirement age as an initial step. This move aims to alleviate the financial strain posed by pensions on the economy.
Read Also: Pakistan’s New Finance Minister: Can Aurangzeb Tackle Economic Crisis in 2024?
Emphasizing the pivotal role of infrastructure development in driving economic growth, Aurangzeb stressed the need for comprehensive tax reforms. He outlined strategies to invigorate the economy through collaboration with the private sector, focusing on both tax and pension reforms.
Aurangzeb also revealed that the International Monetary Fund (IMF) would dispatch a delegation to Pakistan this month to negotiate a new loan program. This initiative aims to enhance international cooperation and positively influence the country’s financial policies and future prospects.
Touching upon recent investment talks, Aurangzeb expressed satisfaction with the outcomes of the Saudi visit, noting progress towards economic goals and a significant boost in foreign exchange reserves following the IMF’s injection of $1.1 billion into the State Bank of Pakistan.
Addressing fiscal discipline, Aurangzeb highlighted the importance of reducing non-development expenditures. He pledged to collaborate with the private sector to drive economic growth while stressing the need to contain pension costs for long-term financial stability.
Furthermore, Aurangzeb hinted at potential collaboration with China through capital market initiatives, signaling a broader strategic vision for economic development.
In addition, Law Minister Azam Nazir Tarar highlighted forthcoming discussions with the IMF, focusing on climate financing and digitalization. He assured transparency in pension reforms and legal amendments aimed at promoting inclusive governance.