Federal Minister for Finance and Revenue Senator Mohammad Aurangzeb has said that the government is fully aware of the challenges facing the economy, admitting that some companies are leaving the country due to high taxes and expensive energy.

Addressing the Pakistan Policy Dialogue in Islamabad on Wednesday, Senator Aurangzeb, however, said there were 20 new foreign investors who have entered the Pakistan market during the last 18 months.

These new foreign investors included Google, Aramco, Wafi Energy, Turkishm Petroleum and others, he added.

The finance minister also revealed that the government will hand over 24 more state units to the Privatization Commission for offloading after the successful sale of the Pakistan International Airlines (PIA).

Aurangzeb said that foreign remittances would cross $41 billion during the current fiscal year as compared to previous year’s $38 billion.

He said handling of tax policy has been delegated to the Finance Division as the Federal Board of Revenue (FBR) is focused on collection of taxes.

Aurangzeb said the circular debt is gradually decreasing due to reforms in the energy sector.

The minister said “There are firms which are also leaving that is true .. if the taxation is high or the energy cost is high or its financing cost is always moving in the right direction those have been real issues.”

Aurangzeb said high taxes and high energy cost remain “real problem for businesses,” adding the government has begun reforms to reduce the burden on the national exchequer and bring economic stability.

“But those firms which have been able to look at business models because it takes two to tango, what the government has to do, and what the private sector has to do, and if you have wedged into their business models for the last 50 years it’s not going to work in the New World Order,” he maintained.

The minister said some of the multinational firms switched to local sourcing “because of their margins are fine and they are now able to export, therefore they stay.” And If another firm has not been able to do that, then that’s something we know they need to think through, he added.

Aurangzeb said structural reforms were underway across the country and that the transformation process of the Federal Board of Revenue (FBR) is continuing. “Compliance and enforcement are essential to ensure implementation of tax laws,” he added.

The finance minister said over Rs1,000 billion are wasted by state units every year. “Utility Stores, PWD and PASSCO were shut down due to losses,” he added.

“Increasing duties is harmful for the country. We have introduced major reforms in tariff and drop in tariffs will automatically spur exports and industrial production,” he remarked.

Aurangzeb remained optimistic about the broader economic landscape, pointing to the government’s ongoing reform efforts aimed at addressing critical issues.

“We are in the process of introducing structural reforms across various sectors, and a transformation of the Federal Board of Revenue (FBR) is already underway,” he said.

These reforms, he explained, are designed to ease the burden on businesses and strengthen the country’s financial systems.

In addition to fiscal reforms, the minister underscored the importance of improving tax compliance and enforcement.

“For tax laws to be effective, proper implementation is crucial. We are focusing on compliance and enforcement to ensure that the reforms are successful,” he said.

Despite the current economic pressures, the Finance Minister expressed confidence that these measures would pave the way for more sustainable growth and attract additional foreign investments in the long run.