Pakistan’s Finance Minister Muhammad Aurangzeb Warns About IMF Cycle and Tax Issues

Islamabad [Pakistan], July 8: Pakistan’s Finance Minister Muhammad Aurangzeb has warned that the country will remain in the International Monetary Fund (IMF) cycle if taxes are not increased. He stated that the upcoming IMF programme will not be the last if tax revenues are not improved.

Aurangzeb is hopeful that Pakistan will reach a staff-level agreement with the IMF this month, estimating the agreement to be worth USD 6-8 billion. He acknowledged that the government’s reliance on imports has led to a cycle of debt and borrowing, stressing the need to enhance the country’s ability to repay loans.

The minister also mentioned the lack of trust in the Federal Board of Revenue (FBR) due to corruption and harassment, which makes people hesitant to pay taxes. He emphasized that the government must demonstrate positive performance in the next 2-3 months to address the country’s financial challenges.

On July 6, employees of a private company staged a protest against the recently announced ‘tax-filled’ budget for 2024-25, which further burdened the inflation-hit salaried class citizens of Pakistan. Hundreds of employees participated in the protest held at Islamabad’s Blue Area. The president of the private company stated that people are unable to bear the new taxes imposed by the government on the salaried class and urged the government to withdraw these taxes.

Last month, during a post-budget press briefing session in Islamabad, the Finance Minister and other government officials failed to answer journalists’ questions about the budget’s impact on common citizens. A Pakistani reporter criticized the government’s fiscal policies during the session.