Pakistan abolishes 150,000 vacant posts, dissolves 6 ministries for $7 billion IMF deal

To remove administrative costs, the government is anticipated to remove 150,000 vacant posts, closing six ministries, and merging two others. As part of the reforms, Finance Minister Mohammad Aurangzeb agreed with the International Monetary Fund, IMF, under the loan deal of $7 billion.  

The IMF Executive Board ratified the loan agreement a few days ago, while, the State Bank of Pakistan, SDP, got a first tanche of approximately $1.03 billion, i.e., SDR 760 million, on Friday, under the Extended Fund Facility Program of 37 months. While addressing the media in Islamabad, he claimed, that after the Federal Cabinet’s ratification, the rightsizing committee had planned to scrap 60% of the vacancies, which is anticipated to assist in minimizing expenditures.  

While explaining and specifying the details of the measures of the government, the Capital Administrative and Development Division, CADDD, ministry would be disintegrated. 

The spokesperson of the government said that scores of high-ranking officials will be targeted for removal. The rightsizing Committee has analyzed and evaluated six ministries so far.  

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In the first phase, the disintegration of one ministry has been ratified while the other two are considered to be merged, he further claimed. However, the Cabinet Committee on Institutional Reforms on 16 August suggested curtailing 150,000 vacant posts by banning contingency recruitment and outsourcing non-core services like janitorial work and cleaning, which is anticipated to progressively phase out or discontinue many positions in grades 1 to 16 in a meeting which is chaired by Prime Minister Shehbaz Sharif, to minimize public sector size and expenditures. 

 A committee attended by the finance minister had put forward its suggestions for right-sizing the federal government departments. The Ministry of Finance was required to oversee the cash balance of other federal ministries. The committee decided to provide an in-depth exploration of suggested reforms for five federal ministries – Gilgit-Baltistan GB, Ministry of Kashmir Affairs, Ministry of Information Technology and Telecommunications, Ministry of Industry and Production, Ministry of State and Frontier Regions, and Ministry of National Health Services. 

By addressing the media, Aurangzeb claimed that measures taken by the government, including securing the International Monetary Fund IMF bailout package, are anticipated to bring economic stability. By widening the tax net, he claimed the government had varied types of data that would be executed in this regard. Only 14% of retailers have decided to be registered in the sales tax sector at this time.  

He further claimed that we decided to block utility services of non-registered people, adding that the government had removed all the exemptions on tax. He also claimed that it is not appropriate to treat taxpayers and non-taxpayers alike. We are left with no choice but to widen or expand the tax base.

The federal minister also claimed that the government is anticipated to enhance the efficiency of the Federal Board of Revenue, and for that particular reason, 2,000 chartered accountants are considered to be hired. The capacity of the FBR to audit will also be improved, hence 2,000 tax audit experts are considered to be appointed in the FBR.