Maps
Magazine

TRADE & ECONOMY

Aurangzeb Calls Budget 2025–26 a Roadmap for Export Growth, Reforms
This is Pakistan’s East Asia moment,” says FM Aurangzeb, backing tariff cuts, subsidy rollback & tax crackdown to boost exports & revive industry.
ND
by News Desk
2025-06-11
Aurangzeb Calls Budget 2025–26 a Roadmap for Export Growth, Reforms

Finance Minister Muhammad Aurangzeb has staunchly defended the recently announced federal budget for FY2025–26, calling it a key step toward transitioning Pakistan into an export-led economy. Addressing a post-budget press conference in Islamabad, the finance czar underlined major tariff reforms, cautious fiscal consolidation, and targeted tax relief as the backbone of the new economic direction.

Tariff Reforms to Support Exports

Aurangzeb stressed that reducing import duties is essential for strengthening exports. "This is Pakistan’s East Asia moment," he declared, highlighting the removal of additional customs duties on four lines and reductions in 2,700 tariff lines directly tied to exporters’ raw materials.

Responding to critics questioning the potential drop in revenue, he maintained: “If we want to move forward, this is the direction of travel. This is not the end state—it’s just the beginning.”

Fiscal Discipline and IMF Commitments

Reiterating Pakistan's commitment to fiscal discipline as required by the IMF, Aurangzeb justified the tough measures: “We either improve enforcement or raise taxes up to Rs400–500 billion. We’ve opted for stronger enforcement, which has already yielded Rs400bn.”

He noted that the government aims to bring the tax-to-GDP ratio to 10.9% in the coming fiscal year, with additional taxes amounting to Rs312 billion out of the Rs2.2 trillion total revenue target.

Salaries, Pensions and Minimum Wage

The federal government announced a 10% hike in salaries and a 7% increase in pensions for government employees. While acknowledging inflationary pressures, Aurangzeb defended the unchanged minimum wage of Rs37,000, stating it was aligned with current industry capacities.

He also defended the salary hike for the Senate chairman and National Assembly speaker, stating it was the first adjustment since 2016.

Journalist Walkout and Accountability

The press conference saw a brief walkout by journalists, led by senior reporter Mehtab Haider, protesting the absence of a technical briefing on the Finance Bill. Aurangzeb, however, continued with the session and later expressed regret over the omission. FBR Chairman Langrial promised to arrange a separate technical session.

Real Estate, Agriculture & Industry

The minister announced relief measures for property buyers and promised capital gains taxation on the selling side only. Mortgage financing reforms were also highlighted.

Aurangzeb clarified that a proposed tax on fertilisers and pesticides was negotiated out with the IMF due to its adverse impact on agriculture. He emphasized increasing financing for small farmers and curbing middlemen influence in agricultural markets.

Taxation on Solar Panels and E-Commerce

FBR Chairman Langrial explained the imposition of an 18% sales tax on fully assembled imported solar panels, saying local assemblers were at a disadvantage. “The incentive phase is over; we must create a level playing field,” he asserted.

FBR Inland Revenue member Dr. Najeeb Ahmad discussed taxation for the digital economy. High-value e-commerce items and boutique clothing are now taxed differently based on profit margins, with efforts underway to plug tax evasion loopholes in online transactions.

Youth, Freelancers & Digital Economy

Highlighting freelancer earnings of $400 million last year, Aurangzeb emphasized the need to empower coders and youth through education and digital infrastructure. “Coders earn $8–10 an hour today—we want to take them to $100,” he said, urging private sector support.

Foreign Bonds and Debt Obligations

Aurangzeb confirmed that Pakistan is fully prepared to meet Eurobond repayments of $500 million in September and another tranche due in March. He expressed optimism about launching yuan-denominated Panda bonds this year, with hopes of reentering the dollar and euro bond markets in 2026.

Final Words

Concluding the session, the finance minister emphasized that recent reforms were only initial signals. “This is not the eventual end state, but a reversal of past practices. It's time we show salaried and tax-paying citizens that the government is serious,” he asserted.

 
Tagged:

FBR

MuhammadAurangzeb

PakistanBudget2025

TariffReform
Share News: