Pension is A ‘Big Liability’, Tax-to-GDP Will Rise to 14% in 4 Years: Aurangzeb

Pakistan’s tax-to-GDP ratio will be increased to 13-14 percent in the next four years but pensions remain a ‘big liability’ and massive reforms are needed to overcome this burden, Finance Minister Muhammad Aurangzeb said in a press briefing on Tuesday.

Talking to reporters alongside Information Minister Attaullah Tarar and Law Minister Azam Nazir Tarar, Aurangzeb said the federal government will take steps to control pension costs, briefly hinting at raising the retirement age as a start. He emphasized the critical role of infrastructure development in enhancing the country’s economy and called for urgent tax reforms.

He emphasized the need for tax and pension reforms and outlined strategies to bolster the economy with the help of the private sector.

Finance Minister said the International Monetary Fund (IMF) will send a team to Pakistan this month to negotiate a new loan program that will encourage international cooperation and positively impact the country’s financial policies and future prospects.

On investment talks, Aurangzeb said the recent Saudi visit was a success. He said economic goals are advancing in the right direction and acknowledged a big improvement in foreign exchange reserves after the IMF deposited $1.1 billion with the State Bank of Pakistan.

Addressing fiscal discipline, the Minister underscored the need to reduce non-development expenditures. He pledged to collaborate with the private sector to drive economic growth and emphasized the importance of controlling pension costs for long-term financial stability.

Aurangzeb also hinted at collaboration with China through capital market initiatives.

Law Minister Azam Nazir Tarar said discussions with the IMF will focus on climate financing and digitalization. He assured transparency in pension reforms and legal amendments to encourage inclusive governance.

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  • Is Pension alone a big liability? No, it is not. I am sure you and no one else in this country will not say what actually is the biggest liability. Everyone is afraid of telling the truth.

    • Pension is a huge liability. Pension needs to be eliminated. All retirees should earn privately or leave the country. Retired bureaucrats are the biggest crooks and liability for this beleaguered country. If pensions cannot be withdrawn, then at least there should be a straight 30 percent tax whether one draws rs 5000 pension or 20 lakhs. Likewise, all salaries should have a straight 30 percent tax as well, whether one earns 30ks or 3 million. Additionally, I propose that a vehicle-like annual token tax be imposed on mobile phones as well. E.g. A person owning a high end phone such as a iphone or a samsung ‘s’ series phone should pay 20,000 annual tax. Mid range phone owners should pay rs. 10000 as annual tax. For low end bar phones (non-smartphones) , rs. 5000 be paid. Tax should also be quadrupled on the internet and personal computers such as desktops and laptops. Only the few privileged elite class should have access to the internet and the purchasing power to buy a computer. I also propose a straight up 50 percent tax from income generated through social media content creation and 80 percent tax from income generated from online freelancing. Social media outlets should also be taxed for operating in the country or be banned permanently for non-compliance. Tax on education and gyms be also increased as right to education and health is not an inherent right. Those who can afford education and healthy activities must pay! In the end, I’d also like to propose imposition of tax on graves and burial as per the deceased’s financial status at the time of death. If, upon non payment of tax by the deceased’s relatives, his/her body be exumed and thrown in a trash can. I hope these suggestions are taken note of for this county’s progresd and prosperity.

      • خدا گنجے کو ناخن نہ دے۔ ٹیکس لگا دیں ہر چیزپہ۔پاکستانی عام شہری پہلے ہی بہت زیادہ ٹیکس دیتا ہے ۔ ماچس کی ڈبیہ سے لیکے گاڑی تک، موبائل لوڈ سے لیکے بجلی کے بل تک۔ سیلری پہ انکم ٹیکس سے لےکہ ایک لیٹر پٹرول پہ گورنمنٹ ٹیکس لیتی ہے اور کیا نکالنا ہے غریب عوام سے۔ محترم اپنا ٹیکس کے ادارے کو ٹھیک کریں ۔انڈسریلسٹ اور بڑے ٹیکس چوروں کو اور ادارے میں موجود ان کے مددگاروں کو پکڑے۔ غریب بندہ ٹیکس دے رھاہے۔ لوٹ وائٹ کالر اشرافیہ رہی ہے

    • No one in the top slot talks about how pension became such a big liability? Pension contribution equivalent amount is amount paid along with salary to contractual employees whereas same amount is withheld as pension contribution in case of permanent employees. The question is why each and every Govt. till now has been spending that amount which was and is meant for making pension payments to the pensioners. That pension contribution was not property of the Govt. rather that was property of the pensioners. That amount should have been invested to get reurns so that no budget allocation for making pension payments needed.
      What happened in the past 77 years was wrong but why that wrong in not being corrected. The proposal for increase in retirement age is no solution of the issue rather it will further worsen the situation. Govt. will have to pay highest salary to 60 years plus employees as compared to fresh ones. This will stop new jobs too. To conclude, finance minister still wants to go in the wrong direction and two wrongs cannot make one right.

  • salaried class paying the taxes for what? if they didnt get even the pension after the retirement. government should lean their unneccessary expenses and create the revenue generation streams.

  • For millions of aged citizens pension is the only source of income. Rather than calling pension a liability the finance minister needs to focus on loans, ghost employees, circular debt and taxation. Leave the poor and elderly alone!

  • Pensions of the Politicians is a big liability. The salary classes pay their taxes. They earn their pensions. Mr finance Minister, you and the whole parliament is a big liability.

  • Please do not reduce govt expenditures nor control corruption, instead get all pensioners shot to over come this liability.

  • Sale out Pakistan to USA / China / Russia. We dont need corrupt bloody politicians and corrupt armed forces Generals.

  • Maintaining 1 million strong army is the biggest liability. With 170 nuclear weapons you dont need foot soldiers. Till the time you dont halve the number of standing army. Every year will be carbon copy of previous one.

  • Pensions, Due to which people are doing jobs on low salaries
    Minus the pension for high Salaried Class
    Liability huh.

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