Finance Minister Muhammad Aurangzeb has assured that the upcoming budget will provide relief to the salaried class, emphasising the need to reduce their tax burden.

Speaking at the Pakistan Banking Summit 2025, he stressed that the government must formulate effective policies for the private sector to boost economic activity.

Aurangzeb highlighted the urgency of privatisation and financial system reforms, adding that strict border security measures have curbed smuggling, with no sugar being illicitly exported to Afghanistan for the first time.

Pakistan Banking Summit 2025

The inaugural Pakistan Banking Summit 2025, organised by the Pakistan Banks Association, saw participation from the finance minister, bank presidents, and international delegates.

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Addressing the summit, Aurangzeb noted that emerging markets have seen remarkable progress over the past 25 years, urging Pakistan to fully leverage its available resources.

He underscored that most finance ministers globally focus on production growth and called on the government to provide policies that enable private enterprises to thrive. He also emphasised the need to accelerate privatisation and financial system improvements.

Pakistan’s position in the global economy

Aurangzeb revealed that he, along with the State Bank governor, recently attended a global conference in Saudi Arabia, where finance ministers from emerging economies stressed the importance of deregulation and reducing bureaucratic red tape.

He urged Pakistan to enhance trade policies with regional countries to ensure economic stability.

He stated that Pakistan’s economic indicators have improved, with the current account recording a surplus in the first seven months of FY 2025.

Inflation and interest rates have also declined, while the government is advancing structural reforms, particularly the digitalisation of the Federal Board of Revenue (FBR).

Crackdown on corruption

Aurangzeb reported a 90 per cent reduction in corruption following the introduction of faceless tax assessments.

He described the enforcement of agriculture income tax as a major structural reform, with provincial finance ministers set to review its implementation.

He further disclosed plans for an Advisory Board to shape policy decisions and said the government is working to prevent unnecessary speculation ahead of the budget announcement.

Privatisation and fiscal management

The finance minister announced that the privatisation of three electricity distribution companies (DISCOs) is set to begin soon, alongside measures to reduce government expenditures.

He emphasised that the focus is shifting from “why” to “how,” particularly in managing pension reforms to reduce fiscal losses.

He also acknowledged that sustainable economic growth is impossible without addressing challenges such as population growth and climate change.

The government has outlined a 10-year partnership strategy, focusing on six key areas — four related to climate change and two to financial affairs.

Boosting exports and investment

Aurangzeb stressed the need for diversifying Pakistan’s exports beyond textiles and improving productivity to compete globally.

He stated that higher local investment would attract foreign investors, expressing optimism that Pakistan’s credit rating would improve soon, potentially reaching a single-digit category.

The minister highlighted positive developments in State Bank inflows and commended mid-sized banks for their role in SME financing.

He urged large banks to enhance their contributions, assuring full government support.

He pointed out that FBR’s digitalisation has reduced human intervention, though complete elimination is not feasible.

Efforts are underway, in collaboration with the Small and Medium Enterprises Development Authority (SMEDA), to enhance capacity building.

IMF engagement and privatisation of PIA

Speaking to the media, Aurangzeb confirmed that an IMF technical mission is in Pakistan for a three-day review on climate financing, with another IMF team expected next month to discuss the bailout package.

He also announced that Pakistan International Airlines (PIA) privatisation is on track for completion this year, with the government fully committed to ensuring its success.

Aurangzeb noted strengthened trade ties with Azerbaijan and Turkey, emphasising Pakistan’s focus on solidifying its economic standing in the region.

He described trade with India as a geopolitical issue, stating that the government is monitoring the situation accordingly.

He reaffirmed the government’s commitment to boosting exports and ensuring strict border monitoring to eliminate smuggling.

The finance minister reiterated that the government is firmly committed to economic reforms and will not backtrack.

He assured that FBR reforms will continue with the same momentum, aiming to broaden the tax base and eradicate corruption.

He also emphasised Pakistan’s vast potential in mineral exports, stating that the government is working to develop this sector. He warned that sustainable development is impossible without expanding the tax base.

Aurangzeb expressed confidence that Pakistan’s economy will stabilise, enhancing the country’s global reputation in the coming years.