Government to Engage Business Leaders on Tax Amendments

Finance Minister Muhammad Aurangzeb has stated that the government intends to prioritize open communication rather than resorting to conflict. He announced that a meeting with business community leaders is scheduled for July 15 (Tuesday) to thoroughly explain the reasons underpinning the tax-related changes.

Speaking to the Overseas Investors Chamber of Commerce and Industry (OICCI) on Monday, he clarified, “This is not about applying pressure; rather, it’s about engaging in dialogue to elucidate the basis for these amendments.”

These comments follow calls from various chambers of commerce and trade bodies for a nationwide strike and demonstrations slated for July 19.

According to representatives of the business community, the government has extended invitations to presidents and office-bearers from various chambers of commerce and associations to convene in Islamabad for discussions regarding the proposed tax reforms, retail tax policies, and other financial issues.

Addressing the media, Aurangzeb noted that Pakistan’s financial health has improved, leading to a reduced need for governmental borrowing. He added, “The government has also repurchased some of its debt, thereby boosting the banking sector’s liquidity and its capacity to extend credit to the private sector.”

He urged banks to not only focus on lending to priority sectors but also to assist the government in its privatization and restructuring initiatives.

“Banks should collaborate with sponsors to facilitate the revival of struggling businesses,” Aurangzeb suggested.

The finance minister highlighted that a recent OICCI survey indicated a marked increase in overall business confidence.

He further reported that the government successfully repatriated approximately $2.3 billion in outstanding dividends and profits during the previous fiscal year.

Aurangzeb also sought OICCI’s support in the ongoing structural reforms within the Federal Board of Revenue (FBR).

Addressing modifications to sales tax regulations, the finance minister assured that the updated sales tax legislation includes measures designed to prevent abuses during crackdowns on tax evaders.

He also mentioned the government’s objective to streamline the tax filing process, noting the introduction of an electronic income tax return form for individuals.

“We are actively seeking input from stakeholders to further simplify this process,” he stated.

Regarding the salaried class, Aurangzeb indicated that the government has reduced their tax obligations within the available fiscal capacity. “This signals our intention to pursue further tax reductions,” he added.

Aurangzeb also announced that the government has disbursed Rs75 billion in sales tax refunds to exporters this month.

In response to a question, Aurangzeb mentioned that the government is conducting monthly monitoring of commodity prices.

He concluded by stating that other sectors, including real estate, agriculture, wholesale, and the trading community, must begin contributing to the GDP.

In response to a separate query, Aurangzeb acknowledged the pharmaceutical sector’s strong recent performance, stating, “They are performing exceptionally well.”