Pakistan’s finance minister said talks with the International Monetary Fund on the third review of the country’s bailout program will be held later this month, as lawmakers raised concerns over the implementation of a controversial super tax and alleged harassment by tax authorities.
Finance Minister Muhammad Aurangzeb told reporters during an informal media interaction that Pakistan has already shared an external financing plan with the IMF and remains committed to it. He added that discussions are ongoing on the National Finance Commission award and that a broader meeting could be convened once the technical committee completes its work.
Aurangzeb said the United Arab Emirates’ $3 billion support remains intact and that Pakistan plans to issue Panda Bonds in China after the conclusion of annual holidays there.
The remarks came during a meeting of the Senate Standing Committee on Finance, chaired by Senator Saleem Mandviwalla, which was attended by Aurangzeb, State Bank Governor Jameel Ahmad and Federal Board of Revenue Chairman Rashid Langrial.
Senator Abdul Qadir criticized the super tax, questioning how businesses could be expected to pay taxes retroactively for the past three to four years. He warned that excessive pressure on performing businesses could drive investors out of the country and said the business community and chambers of commerce have serious reservations about the policy.
Qadir also accused the FBR of harassing taxpayers and urged the government to allow tax recovery over two to three years instead of demanding immediate payments.
In response, Aurangzeb said the government would consult the committee on the issue during deliberations on the next fiscal year’s budget and directed the FBR chairman to provide a detailed briefing. He assured lawmakers that no business would be shut down and that installment plans could be offered in certain cases.
Langrial said total recovery from the super tax amounts to PKR 217 billion ($780 million), rejecting media reports that placed the figure at PKR 300 billion ($1.1 billion). He said the FBR has successfully curbed tax evasion and smuggling.
The meeting also saw debate over the government’s plan to privatize or shut down state-owned enterprises. Senator Sherry Rehman warned that job opportunities are already scarce and that closing public sector entities could worsen unemployment.
Aurangzeb said employees affected by privatization are being offered generous separation packages and cited the example of bank privatization, when tens of thousands of workers were laid off but later re-employed. He said privatization would ultimately boost business activity and job creation.
Addressing concerns over FBR text messages sent to citizens, Langrial said the messages are sent only to taxpayers, mainly congratulating them on property purchases and reminding them to declare such transactions in their tax returns. He said the initiative has helped increase the number of taxpayers by one million.
Aurangzeb confirmed he had also received such a message and said there was no issue with the practice.
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