ISLAMABAD  -   Finance Minister Muhammad Aurangzeb on Thursday said that Pakistan would finalise a deal with the International Monetary Fund (IMF) in the current month.

He said that talks with the IMF are moving in positive direction and both sides would reach a staff level agreement on new programme within this month. “The talks with the IMF are progressing positively,” he said while briefing the National Assembly’s Standing Committee on Finance and Revenue.

He said that the government would enhance the tax to GDP ratio to 13 percent from existing only 9 percent, which is not enough to run the country. “The IMF requires taxation on the actual income which is fair,” he said. The government would bring all sectors into tax net as directed by the Prime Minister Shehbaz Sharif, he added. He informed that the government has increased the taxes to broaden the net.

He further stated that there was a need to reduce human interference in the Federal Board of Revenue (FBR) system. He said that the government will work on increasing people’s trust in the FBR.

Aurangzeb went on to say that loan and interest repayment had a major share in the government’s expenses.

He further stated that five federal ministries would be abolished, as announced by the Prime Minister following the budget 2024-25 presentation last month and added that the decision in this regard will be made by July 30. He said that all the economic indicators remained positive during the last fiscal year, while the foreign exchange reserves remained well above $9 billion. Moreover, the inflation rate saw a gradual decline during the last fiscal year, he added.

He said that the Pakistani currency destabilised due to a delay in the IMF programme in 2023. Some changes were being made in the service structure of the military, saying that the military’s entire service structure needed amendments.

He said that a system of contributory pension for the Armed Forces of Pakistan will be launched. He said that the system has been notified for the civil servicemen from July 1, 2024; however, new pension scheme for the military servicemen will be applicable from July 1, 2025. “Those joining service from July 1 will receive their pensions under the new scheme,” he added.

The meeting of the Standing Committee on Finance and Revenue was held, in the, Parliament House, Islamabad, under the Chairmanship of Syed Naveed Qamar, MNA/Chair.

The Committee was briefed on overview of the Economy, GDP Growth, Budget Deficit, Current Account, Inflation, Unemployment, Interest Rates, Energy Circular Debts and other Economic Indicators. Minister, Minister of State and Secretary Committee briefed the committee on corrective Measures proposed to meet the challenges to the economy in the budget and beyond. They said corrective measures have been taken to address the fiscal deficit and the country’s external accounts. They said that the Government is negotiating an IMF Program to address structural weaknesses in the economy. They hoped that Financial year 2025, the government will achieve the targeted GDP growth at 3.6% and inflation at 12%.

Minister for Finance also briefed the Committee on State of negotiation with the IMF, conditionality and roadmap to meet them in an in-Camera session and replied to a number of questions / queries of the Chair and Members of the Committee.