PESHAWAR: Minister for Finance and Revenue Muhammad Aurangzeb said on Wednesday that the government plans to shut down more departments as part of an International Monetary Fund-driven “rightsizing” exercise aimed at reducing state expenditure.
“Efforts are being made to reduce state expenditure…we are shutting down more departments and attached departments,” the finance czar said while addressing the business community in Peshawar.
The federal government has formulated a rightsizing programme by abolishing various ministries and their attached departments to reduce expenditures and improve government efficiency. In January, Aurangzeb vowed to rightsize 42 ministries and their 400 attached departments by June 30 of the current fiscal year, adding that the rightsizing committee would reduce 80 institutions to half.
“60% vacant regular posts — that have not come in payroll — which stood at 150,000 have been abolished or declared as dying posts, creating a real financial impact,” he had said.
Recently, the federal government abolished the Ministry of Aviation and merged it into the Ministry of Defence. Through this merger, the government was eyeing a saving of Rs145 million annually.
Addressing the attendees at the Peshawar Chamber of Commerce today, the finance minister said that it was the government’s job to formulate a policy and continue it.
“The country’s economy is moving towards stability,” Aurangzeb said, noting that the country was yielding positive results through the economic measures taken by the government.
Furthermore, he said, the government was taking input from the business community for the upcoming budget, vowing to continue supporting all sectors in all provinces.
Regarding tax collection, Aurangzeb said they were taking steps to reduce human intervention in the Federal Bureau of Revenue (FBR) via modern technology, including artificial intelligence. “When human intervention lessens, leakage will lessen — which is a milder word of saying corruption,” he added.
“One structural step that we have taken is that the tax policy has been taken out of FBR and placed in the finance ministry,” he added.
To meet the IMF terms, the government in February separated the tax policy from the tax-collecting body and notified the creation of the Tax Policy Office (TPO), headed by the finance minister.
The government has separated FBR’s policy wing from the operations agreed with the IMF and placed it in the Ministry of Finance. However, this process will take a few months so the placement of the Policy Wing in the Ministry of Finance could become operational from the next fiscal year 2025-26, The News reported.
According to the notification, the Tax Policy Office will lend support to the analysis of tax policies and proposals through data modelling, revenue and economic forecasting as well as the country’s international tax treaties and obligations.
The Tax Policy Office will report directly to the Minister for Finance. The staffing to the said office as approved by the federal cabinet, shall be undertaken with the approval of Establishment Division and Finance Division as per terms and conditions prescribed by the government. –Agencies
