Finance Minister Mohammad Aurangzeb said that China is to support Pakistan in securing IMF deal.
Minister for Finance and Revenue Senator Muhammad Aurangzeb announced on Sunday that the Chinese Government has praised Pakistan’s negotiations with the International Monetary Fund (IMF) and promised to assist in securing the Fund’s board approval.
During a press conference, the minister mentioned that he, along with Minister for Energy Sardar Awais Ahmad Khan Leghari, visited China and had productive meetings with Chinese officials, including the Finance Minister and the President of the Bank of China.
The minister highlighted that in early June, he and the energy minister visited China to discuss various aspects of bilateral trade and economic cooperation, focusing on local energy needs and the introduction of Panda bonds in Chinese markets.
In the recent visit, they also discussed re-profiling energy sector loans and converting energy plants to coal for affordable energy generation, with high-level meetings ensuring their issues were registered with the right authorities.
Aurangzeb stated that the matters discussed would be advanced through memorandums of understanding (MoUs) and various working groups to be formed in the future.
He emphasized that China, one of the world’s largest capital markets, would help Pakistan diversify funding sources and strengthen foreign exchange reserves by issuing Panda bonds to attract Chinese investors.
Prime Minister Muhammad Shehbaz Sharif also discussed energy requirements with Chinese leaders, seeking support to overcome power supply issues essential for socio-economic development. Discussions with the IMF were reported as positive, with all benchmarks met.
Aurangzeb highlighted that China, Saudi Arabia, and the UAE have consistently supported Pakistan’s economic growth and development.
Domestically, the government is taking steps to improve the economy, focusing on broadening the tax base by including non-taxed sectors and simplifying tax returns to achieve a 13 percent tax-to-GDP ratio.
The government has introduced the Tajir Dost Scheme for voluntary tax compliance, offering benefits to unregistered businesses and plans similar facilities for other sectors to ease tax return processes and expand the tax net.
Prime Minister Sharif is overseeing tax reforms and digitization to prevent revenue leakages and identify under-taxed sectors, with the Federal Board of Revenue identifying 4.9 million income tax non-filers through digital data analytics.
The government is also working on right-sizing ministries and divisions to reduce expenditure and create fiscal space for social sector development, starting with five ministries.
Aurangzeb acknowledged that inflation rose following GST measures in the Federal Budget for FY 2024-25 but pointed out some elements for artificially inflating prices and urged provincial governments to ensure fair pricing of essential commodities.
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