LAHORE   -   Federal Minister of Finance and Revenue Senator Muhammad Aurangzeb on Saturday said that there is a possibility of a gradual decrease in the policy rate in the current year.

While addressing the business community at the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Regional Office in Lahore, Aurangzeb said he will speak cautiously about the policy rate as it is a subject of the State Bank. He also said that we will increase the tax-to-GDP ratio to 13% over the next three years. Foreign exchange reserves have crossed $9 billion. The budget needs to be viewed in a broader context. We will certainly consider the concerns of industrialists.

He further said Pakistan is the only country in the world where the term non-filers is invented. He called for changing the image of Federal Board of Revenue. Unfortunately, Aurangzeb said people don’t have trust on FBR.

“We are digitalizing the FBR system. We are taking steps to eliminate human intervention. We are also taking steps to stop leakage in the system. The restructuring of FBR is important.” The finance minister said the measures taken by caretaker government have greatly helped the new government. He also said all outstanding payments to the investors have been made.

“We will work together with the FPCCI Research Cell to determine what needs to be done on the export side and how to run the industry,” Aurangzeb said. He also said in the last government agreements were signed with the IPPs (independent power producers).

There are sovereign guarantees but we are reviewing them. The budget has increased financing for SMEs (small and medium enterprises). If the issues of distribution companies are not resolved, electricity prices will continue to rise. Foreign investors are as important as local investors. We will definitely consider the difficulties faced by traders in the budget.

He said for the country to move forward, the private sector must lead. The sector in which government intervention ends sees growth and its exports also increases.

State Minister for Finance and Energy, Ali Pervez Malik, said, “We have presented the budget in extraordinary circumstances. We assure the business community that as soon as fiscal space is created, we will provide relief to the business community.”

He said 45 lac new taxpayers will be included in the tax net. Imposing taxes on the salaried class and milk is a very difficult decision for any government. We understand these difficulties, he added.

He further said that as soon as the situation will improve, we will provide relief to the people. Once the country is put back on track, everyone will be provided relief. Due to government measures, the inflation rate has come down from 40% to 12%. He also emphasized the need to reduce interest rates.

FPCCI Vice President Saqib Fayyaz Magoon, former caretaker Federal Minister for Trade, Industry, Investment, and Interior, and chairman of the National Economic Think Tank Dr Gohar Ejaz, FPCCI Regional Chairman and Vice President Zaki Ejaz, Patron-in-Chief of the United Business Group (UBG) and former caretaker Provincial Minister for Industry and Trade and Energy SM Tanveer, FPCCI Vice President Asif Inam, Qura-tul-Ain, and Tariq Javed said that the agreements with IPPs should be cancelled immediately.

They said FPCCI is working on Vision 2030 to increase exports to $100 billion. The policies being made should be trusted by FPCCI. We should move towards a zero-cash economy, which will increase the tax net. Industrialists are worried about the electricity tariff. If the electricity tariff is reduced, we will increase exports by $6 billion.

They further said we can only get rid off from IMF only through increasing our exports, adding that this could only be done by providing energy to the industry on regional competitive rates. They demanded that a 20-year industry policy should be given, and we will fulfil the dream of becoming a economic tiger. Business is not possible at a 20% interest rate, they concluded.