In an effort to minimize administrative costs, cash-strapped Pakistan announced today (September 29) that it will abolish around 150,000 government jobs, close six ministries and merge two others, as part of reforms agreed with the IMF in the framework of a loan of 7,000 million dollars. deal.
On September 26, the International Monetary Fund finally gave its nod to the aid package and also released more than $1 billion as the first tranche after Pakistan pledged to cut spending, increase tax-to-GDP ratio and tax non-governmental sectors. traditional ones such as agriculture and real estate. , limit subsidies and transfer some fiscal responsibilities to the provinces.
Finance Minister Muhammad Aurangzeb talks about job cuts and other financial issues.
Upon returning from the United States, Finance Minister Muhammad Aurangzeb told the media that a program with the IMF had been finalized, which would be the last program for Pakistan.
“We need to implement our policies to show that it will be the last program,” he said, emphasizing that to join the G20, the economy must be formalized.
The minister said a right-sizing was taking place within the ministries and the decision to close six ministries will be implemented, while two ministries will be merged. “In addition, 150,000 posts in various ministries will be eliminated,” Aurangzeb said.
He dwelt at length on the increase in tax revenue, noting that last year there were approximately 300,000 new taxpayers, and so far this year there have been 732,000 new taxpayers, increasing the total number of taxpayers in the country to 1.6 million to 3.2 million.
Those who do not pay taxes will no longer be able to buy property or vehicles: Ministry of Finance
Aurangzeb also said that the category of non-filers will be abolished and those who do not pay taxes will no longer be able to purchase properties and vehicles. The minister stated that the economy is moving in the right direction and that the country’s foreign exchange reserves have increased to their highest level. He highlighted significant growth in both domestic exports and IT exports and stated that investor confidence in the strength of the economy is a great success.
Stating that the government reduced the policy rate by 4.5 percent after coming to power, Aurangzeb expressed optimism that the exchange rate and policy rate will remain as expected.
“Our claim that the economy is improving is not an empty claim because inflation has decreased due to government policies. “Inflation has fallen to single digits,” he said.
Pakistan has negotiated a long-term loan with the global lender with the hope and commitment that it will be the last loan. However, many doubt this claim, as the country has already obtained about two dozen loans from the Fund, but failed to address the economy permanently.
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