Finance Minister Muhammad Aurangzeb has stressed the need for including the undocumented economy in the tax system, asserting that the country cannot support ‘free riders.’

“The formal sector is paying taxes. This is not sustainable, and the only way we are going to bring in sustainability if other segments including agriculture, retail and wholesale, the real estate step up,” he said at a conference ‘Retail Reimagined: Innovate, Collaborate & Thrive’ organised by the Pakistan Retail Business Council in Islamabad on Tuesday.

“We cannot continue to go back to the same for more. The manufacturing industry, to a certain extent the services industry and the salaried class are carrying a disproportionate burden.”

He said: “This country cannot afford that people want to take a free ride and don’t want to come into the tax net. We just can’t afford this anymore,” he said.

The finance minister highlighted that there was an “urgent necessity” to document the parallel economy. He pointed out that the retail sector accounted for 19% of the total GDP, yet its contribution to the treasury was “merely 1%.”

Read more

Pakistan aims to privatise PIA, outsource Islamabad airport in Nov: Aurangzeb

Post-budget presser: Pakistan to get rid of cash transactions, says Aurangzeb

Finance minister laments lack of funding for research to develop agriculture sector

Aurangzeb reaffirmed that “macroeconomic indicators have improved,” including a reduction in inflation, lower policy rates, currency stability, and an increase in foreign exchange reserves.

He said that the government intended to make Pakistan “a bankable brand again” and avoid “another boom and bust cycle”, emphasising achieving sustainable growth.

“It is very important to restore the trust and credibility in the tax authority,” he stated.

“The privatisation process of PIA is getting to be relaunched, but we are very determined to take this forward,” he said.