ISLAMABAD, NOV 30 /DNA/ – Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb, in a wide-ranging press conference in Islamabad today, has underscored the Government’s decisive shift toward an inclusive, private-sector-driven and export-led growth model, highlighting the recent abolition of the Export Development Surcharge (EDS) as a key demonstration of this commitment.
He noted that the Government’s earlier decision to eliminate the decades-old levy, alongside reforms to strengthen the Export Development Fund’s governance, reflects a clear policy direction aimed at boosting competitiveness, empowering exporters, and laying the foundations for sustainable economic expansion.
The Minister stated that in line with the Prime Minister’s directive to place the private sector at the centre of Pakistan’s economic expansion, the Government had accepted recommendations to overhaul the EDF’s governance structure. He noted that the Prime Minister had gone beyond the private sector’s proposal by approving the complete abolition of the Export Development Surcharge introduced in 1991 ending the 0.25% levy that exporters had paid for decades. The matter has already been summarised for Cabinet approval, after which its implementation will begin immediately.
He emphasised that this step reflected the Government’s resolve to empower exporters, improve competitiveness, and channel resources and decision-making authority toward the private sector to realise Pakistan’s export potential.
Senator Aurangzeb reiterated that the Government’s medium-term economic vision rests on moving from stabilisation to durable, broad-based and inclusive growth led by exports, remittances, productivity and private investment. He stated that recent months had shown clear signs of momentum in domestic economic activity, noting that from July to October, cement production rose by 16 percent, fertiliser by 9 percent, petroleum by 4 percent, automobiles by 31 percent, and mobile phone manufacturing by 26 percent. Large-scale manufacturing grew by 4.1 percent year-on-year in the first quarter, reflecting a positive shift compared to the contraction recorded last year. He emphasised that the challenge ahead was to sustain this trajectory while ensuring that Pakistan does not return to the boom-and-bust cycles driven by external sector pressures.
The Minister highlighted that export performance had strengthened, with overall exports rising 5 percent and IT services exports growing by over 20 percent year-on-year. He stressed that the IT sector had recorded back-to-back monthly highs in September and October, establishing itself as a critical pillar of the “new economy,” alongside emerging sectors such as minerals and mining. He noted that the $3.5 billion Reko Diq-related syndication, led by IFC and now financially closed following the resolution of procedural delays, represents a transformational investment that will generate an estimated $2.8–$2.9 billion in annual exports once production commences.
The Minister reported that remittances had also shown robust strength, reaching $38 billion last year and expected to surpass $41 billion this year, providing a sizeable buffer to the current account. He added that the Government was managing imports carefully under a reformed tariff regime designed to support industrial competitiveness by prioritising raw materials and intermediate goods while gradually phasing out long-standing protectionism. This transition, he emphasised, will be phased over four to five years to enable domestic industries to become internationally competitive.
Senator Aurangzeb underscored that structural reforms remained central to the Government’s agenda. He confirmed that the new Tax Policy Office—now operational under the Finance Division—had conducted its first advisory board meeting and would henceforth be responsible for preparing tax policy and the national budget. The objective, he said, was to bring consistency, analytical rigour, and private-sector input into the policy-making process while allowing FBR to focus on enforcement, compliance and technology-driven administration. He noted that work on pension, debt, SOE reform, the digital economy, taxation, energy, and rightsizing was proceeding as committed earlier.
On public finance, the Minister reported that Pakistan’s domestic debt stock had stabilised for the first time in nine years, and debt servicing costs had begun to decline with the reduction in the policy rate. He confirmed that Pakistan’s inaugural Panda Bond supported by credit enhancement from ADB and AIIB and approved by China’s central bank, would be issued before December or, at the latest, before the Chinese New Year, helping diversify Pakistan’s funding base and reduce borrowing costs.
The Minister announced that the 11th NFC Award process would begin next week, with Chief Ministers and provincial finance teams joining deliberations. He emphasised that revenue, expenditure and governance reforms require constructive federal–provincial engagement and expressed confidence that the meeting would be held in a spirit of “Pakistan First,” following the consensus approach demonstrated during the National Fiscal Pact.
Speaking on the Global Diagnostic and Corruption Report, Senator Aurangzeb clarified that the Government itself had requested and facilitated the assessment to strengthen institutional reforms. He noted that the report acknowledged significant progress in sectors including taxation and governance, and that many of its priority recommendations were already work in progress. He affirmed the Government’s commitment to implementing the remaining recommendations as part of broader institutional reforms essential to sustaining Pakistan’s economic turnaround.
The Minister also addressed questions on taxation, energy costs, and competitiveness, acknowledging the concerns of the formal sector regarding high taxation and tariffs. He reiterated that the Government was committed to expanding the tax base, enhancing enforcement, reducing leakages, and ensuring fairness between formal and informal sectors. He pointed out that tax refunds had risen from Rs 200 billion to Rs 250 billion over the five-month comparison period, reflecting responsiveness to industry needs. He noted ongoing work in reducing circular debt and improving energy pricing, explaining that tangible progress had already been achieved on the financing and energy fronts.
Responding to questions about the sugar sector and commodity governance, the Minister stated that durable reform required a full transition away from government involvement—from import and processing to trading and regulation. He emphasised that persistent distortions cannot be eliminated without structural changes and that the Government remained committed to deregulation and transparency.
Senator Aurangzeb drew attention to the strong interest of international firms in Pakistan across sectors, including energy, mining, IT, telecom, construction, logistics and EV manufacturing. He cited recent commitments from global companies such as Aramco, Wafi, Gunvor, Turkish Petroleum, Barrick Gold, Citizen Metals, Nova Minerals, BYD, Chery, NWTN Motors, Abu Dhabi Ports, and Google whose senior leadership recently announced the opening of a Pakistan office to serve as a future technical and export hub.
In concluding remarks, the Minister reiterated that Pakistan had turned a corner from the crisis of two years ago and was now pursuing a stable, export-driven, investment-focused growth model grounded in structural and institutional reforms. He stressed that agriculture, large-scale manufacturing, the new economy, remittances and private investment would collectively contribute to a more resilient and inclusive economic future for Pakistan. He reaffirmed that the Government would continue to engage with the media monthly to provide updates on progress and ensure transparency in economic decision-making.
