KARACHI — Finance Minister Muhammad Aurangzeb on Wednesday expressed confidence that Pakistan will be able to absorb the impact of recently imposed US tariffs, citing ongoing diplomatic efforts and commodity trade as potential stabilizing factors.
Speaking at the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) in Karachi, Aurangzeb noted that Pakistan maintains active engagement with US officials, including discussions during recent World Bank and IMF spring meetings. He also mentioned the prime minister’s decision to dispatch a delegation to Washington for negotiations over the tariffs.
Aurangzeb said Pakistan’s exports to the United States currently stand at approximately $5 billion, compared to $2 billion in imports. Although the average tariff differential is around three percent, he said this could be offset through the trade of key commodities such as cotton and soybeans.
Sharing insights from Pakistan’s recent US visit, the minister revealed that the delegation held over 70 meetings with representatives from international financial institutions, partner countries, and global think tanks. These engagements, he said, were focused on boosting economic cooperation and strengthening Pakistan’s reform agenda.
The finance minister highlighted improving macroeconomic indicators, including a significant drop in inflation and a projected current account surplus for the fiscal year. He credited the progress to effective coordination across federal and provincial bodies.
Aurangzeb emphasized that the government is committed to long-term structural reforms, asserting that Pakistan is determined to make its 24th programme with the International Monetary Fund (IMF) its last. “This time, we are implementing real economic and structural reforms for the country’s future,” he said.
He also ruled out further tax increases for the salaried and business segments, noting that these groups are already heavily taxed. Instead, the government is prioritizing simplification of the tax return process, aiming to make filing easier without needing assistance from lawyers or tax consultants.
In line with this goal, Aurangzeb said efforts are underway to revamp the Federal Board of Revenue (FBR), including separating the tax policy unit and placing it under the finance ministry. From the next fiscal year, tax policy formulation will be handled by this independent office, while the FBR will focus solely on collection.
Energy sector reforms are also a top priority. The minister mentioned that improvements in electricity generation, transmission, and distribution have contributed to a reduction in power tariffs, with more relief expected in the coming months.
He acknowledged the challenges of high financing, energy, and tax costs for businesses but highlighted recent cuts to the policy rate—down by 1,000 basis points—as a step towards easing the burden. The government is also reviewing tax rationalization proposals for the upcoming budget.
Aurangzeb concluded by noting that budget consultations began early this year, and input from chambers of commerce and trade bodies is being given serious consideration to ensure a more responsive and inclusive fiscal policy.
