Islamabad: In a pivotal move to bolster the nation’s economic standing, Finance Minister Muhammad Aurangzeb has reaffirmed the government’s commitment to improve the tax-to-GDP ratio. This pledge was made during a virtual meeting with senior officials from Fitch Ratings, where discussions focused on Pakistan’s ambitious fiscal consolidation measures.

According to Ministry of Information and Broadcasting, Aurangzeb engaged in comprehensive discussions with Fitch Ratings representatives, including Senior Director Thomas Rookmaker and Directors for Asia Pacific Sovereigns, Krisjanis Krustins and Jeremy Zook. The meeting addressed Pakistan’s ongoing reforms in the energy sector and State-Owned Enterprises, highlighting significant strides towards privatization and rightsizing of federal entities to enhance operational efficiency and governance.

The Finance Minister detailed the newly minted Staff-Level Agreement with the International Monetary Fund, which underscores a medium-term program designed to amplify Pakistan’s own economic reforms. Key goals of this program include a revenue increase of 1.5 percent of GDP by Fiscal Year 2025 and reaching a primary surplus of one percent of GDP.

Aurangzeb also underscored the recent economic milestones achieved under Pakistan’s 9-month Stand-By Arrangement with the IMF, noting a substantial impact on the country’s macroeconomic framework. He reported that Pakistan’s foreign exchange reserves have climbed to $9.4 billion, coupled with a robust performance of the stock exchange and a Consumer Price Index inflation rate of 12.6 percent last month. The Minister also highlighted a 7.7 percent increase in foreign remittances and a notable growth in IT exports, which have now surpassed three billion dollars.

The meeting also covered the government’s efforts to widen the tax base, which has seen a remarkable 30 percent increase in tax collections this fiscal year compared to the previous one, and the addition of over 150,000 first-time tax registered retailers.

The Fitch Ratings representatives acknowledged the ambitious targets and fiscal measures adopted by the Government of Pakistan, expressing optimism about the improvement in economic indicators.