Some firms left Pakistan due to high taxes, energy costs, admits FM Aurangzeb

ISLAMABAD (Dunya News) - Federal Minister for Finance Muhammad Aurangzeb has acknowledged that several companies exit Pakistan, admitting that high taxation and elevated energy prices have become serious challenges for businesses.

Speaking at the Pakistan Policy Dialogue in Islamabad, the finance minister said that sustainable economic growth is only possible through structural reforms. He stressed that the government is taking measures to stabilise and improve the economy, while urging the private sector to play a more active role in driving growth.

Aurangzeb explained that tax policy has been shifted from the Federal Board of Revenue (FBR) to the Finance Division to clearly separate policy formulation from tax collection. He noted that FBR’s primary focus will now be revenue collection, adding that by June this year, all government payments will be routed through digital channels. Efforts are also underway to bring non-banking individuals into the formal financial system.

Referring to remittances, the finance minister said Pakistan received $38 billion in remittances last year, with inflows expected to rise to $41 billion in the current fiscal year.

He emphasised the need to rationalise duties and reduce the cost of doing business. For the first time in 78 years, tariffs on raw materials are being reduced under tariff reforms, a move he said would boost exports and industrial production. Aurangzeb described the ongoing economic reforms as a potential “East Asia moment” for Pakistan.

The finance minister also highlighted progress on privatisation, noting that local investors participated in the privatisation of Pakistan International Airlines (PIA), while 24 institutions have been handed over to the Privatisation Commission. He said state-owned enterprises were causing annual losses of nearly Rs1,000 billion, leading to the closure of entities such as Utility Stores, PWD and Pasco due to corruption in subsidies.