Aurangzeb cites IMF-driven reforms as businesses warn of crippling energy costs and collapsing investment
LAHORE:
Federal Finance Minister Senator Muhammad Aurangzeb on Saturday said that sustained, meaningful dialogue between the government and the business community is essential for finding workable economic solutions, stressing that engagement limited only to the annual budget cycle cannot address structural problems. Addressing the All Pakistan Chambers Conference hosted by the Lahore Chamber of Commerce and Industry (LCCI), he said constructive discussions have recently taken place between the federation and the provinces on the NFC Award, leading to the formation of eight working groups, with progress expected by January 15.
He added that the State Bank of Pakistan has received $1.2 billion following the approval of the International Monetary Fund (IMF) programme and invited the private sector to participate in the privatisation of Pakistan International Airlines (PIA). Aurangzeb also told participants that the IMF diagnostic and corruption report resulted from a transparency process initiated by the government itself, not one targeting any specific administration. He said an action plan is now being prepared to address the structural weaknesses highlighted in the report.
LCCI President Faheemur Rehman Saigol, speaking earlier, said that the cost of doing business had reached an unbearable level, creating an urgent need for industry-wide relief. He said the high policy rate and expensive electricity and gas were compelling industries to relocate abroad. He added that agreements with independent power producers (IPPs) should undergo forensic audit and electricity tariffs should be aligned with regional countries.
The LCCI chief said non-filers should be incentivised and integrated into the tax net while existing taxpayers should be facilitated. Calling for a simple and transparent tax system, he urged the abolition of unnecessary withholding taxes. According to him, Pakistan is facing a widening trade deficit, and exports can only grow if exporters are supported through the restoration of the Final Tax Regime and timely payment of duty refunds. Saigol further pointed to annual losses of around Rs850 billion incurred by state-owned enterprises (SOEs), calling them a major economic burden and arguing that immediate privatisation had become essential. He said investment in the country is at a 25-year low, stressing the importance of promoting domestic investment. He also sought collateral-free and cash-flow-based financing for SMEs to generate employment and increase exports.
Aurangzeb, continuing his address, said remittances remain the backbone of the economy and noted ongoing efforts to deepen the local bond market and deregulate commodity markets. He announced that the Pakistan Agricultural Storage and Services Corporation (PASCO) would be abolished, with strategic reserves to be maintained through the private sector. He said the Tax Policy Office has been separated from the Federal Board of Revenue and placed under the Finance Division to ensure long-term and stable policymaking. Acknowledging pressures on the formal sector and salaried class, he said action is being taken against non-compliant sectors. He stressed that only the private sector can drive economic growth, while the government’s role is to provide an enabling environment.
Aurangzeb said large-scale manufacturing has grown by 4%, IT exports have crossed $4 billion, and remittances are expected to reach $41-42 billion. He also mentioned steps related to PIA privatisation, crypto, blockchain and the digital economy, and proposed establishing a research cell at the Lahore Chamber.
SAARC Chamber Vice President Mian Anjum Nisar said extremely high electricity prices remain a fundamental concern.
LCCI Senior Vice President Tanveer Ahmed Sheikh said the FIR culture against traders must end, warning that if local investors do not feel secure, attracting foreign investment will be difficult. Presidents of the Chambers of Chaman, Quetta and Sarhad urged the opening of border trade, saying closures were hurting their exports to Central Asian states.
