Pakistan is poised to embark on a significant economic transformation, transitioning to an Islamic interest-free fiscal system as per the directives of the Federal Shariat Court. The Finance Minister, Muhammad Aurangzeb, has affirmed the government’s commitment to abolishing the prevailing interest-based system and implementing Islamic interest-free fiscal principles. The country’s foreign exchange reserves, currently reliant on interest, are expected to receive a boost with the imminent arrival of a new tranche of $1.19 billion from the International Monetary Fund.
To promote an interest-free economy, the government plans to establish Islamic banking branches across the nation. Recognizing the importance of agricultural growth, the government aims to achieve an annual growth rate of 5% to 6% in this sector and harness the potential of the local livestock industry. The success of recent bumper crop harvests has led to significant growth in the agricultural sector, which is expected to have a positive impact on the industrial sector.
The Finance Minister emphasized the need to enhance the tax-to-GDP ratio, currently at 9%, through tax enforcement measures and expansion of the tax base. Pakistan enjoys the support of friendly nations both domestically and internationally, which contributes to its economic growth. The government has identified three key areas for transformation: tax, energy sectors, and reforms in State Owned Enterprises. The Finance Minister expressed his intention to enhance the tax-to-GDP ratio through tax enforcement and expansion of the tax base.
