Pakistan aims to increase revenue by 1.5 percent of GDP this year under new IMF deal — minister

Pakistan’s finance minister, Muhammad Aurangzeb, holds a virtual meeting with representatives of Fitch Ratings agency, on July 22, 2024. (Government of Pakistan)

• The statement came during Finance Minister Muhammad Aurangzeb’s virtual meeting with representatives of Fitch Ratings agency
• The discussions encompassed reforms in energy sector and state enterprises, including privatization and ‘rightsizing’ of entities

ISLAMABAD: Pakistan’s finance minister, Muhammad Aurangzeb, said on Monday the South Asian country aimed to increase its revenue by 1.5 percent of the gross domestic product this fiscal year under a new $7 billion loan deal with the International Monetary Fund (IMF).
The Pakistani finance minister said this during a virtual meeting with representatives of Fitch Ratings agency, including Senior Director Thomas Rookmaker, and Directors Asia Pacific Krisjanis Krustins and Jeremy Zook.
The discussions encompassed ongoing reforms in the energy sector and state-owned enterprises, including privatization and “rightsizing” of government entities to streamline operations and improve governance, according to the finance ministry.
Aurangzeb informed the rating agency about multilateral institutions’ confidence in financing Pakistan’s projects and briefed them on the staff-level agreement reached with the IMF this month to bolster Pakistan’s homegrown economic reform agenda.
“The Federal Minister apprised the Fitch representatives of salient features of the new program which includes setting a target of increasing our revenues by 1.5 percent of GDP in FY 2025 and by 3 percent over the coming 3 years,” the finance ministry said in a statement. “A primary surplus of 1 percent of GDP will also be achieved for FY 2025.”
He provided an extensive update on Pakistan’s current economic landscape and highlighted Pakistan’s foreign exchange reserves had reached $9.4 billion, robust stock exchange performance, and CPI inflation recorded at 12.6 percent in June.
The minister noted a 7.7 percent rise in foreign remittances and emphasized the government’s efforts to broaden the tax base, citing a 30 percent increase in tax collection during the outgoing fiscal year as compared to previous year.
“More than 150,000 retailers have registered as first-time tax payers. The IT exports crossed the figure of USD 3 billion,” Aurangzeb was quoted as saying by his ministry.
Pakistan’s new government presented its first budget in parliament last month, setting an ambitious tax collection target. Aurangzeb said at the time Pakistan wanted to collect Rs13 trillion ($44 billion) in taxes, which would be 40 percent more than the outgoing fiscal year.
“The representatives from Fitch Ratings appreciated the ambitious targets and fiscal measures adopted by the Government of Pakistan and acknowledged the improvement in economic indicators,” the finance ministry added.