# US $10bn Facility to Support Market-Based Financing, Not a Loan: Aurangzeb
**ISLAMABAD:** Finance Minister Muhammad Aurangzeb has clarified that Pakistan’s proposed **$10 billion facility from the United States would not be a loan or credit line**, but a mechanism aimed at strengthening currency and exchange-rate stability and enabling the country to raise longer-term financing from international capital markets.
Speaking to the media after launching a simplified tax scheme for small traders, Aurangzeb said Pakistan was awaiting a response from the **US Treasury by the end of September** regarding its request for support from the US Treasury’s Exchange Stabilisation Fund.
“This is not about a credit line or a loan,” the minister said, explaining that the facility would send a signal regarding Pakistan’s currency and exchange-rate stability, which could help the country access international capital markets.
Pakistan is also in discussions with the **US Export-Import Bank (EXIM)** and the **US Development Finance Corporation (DFC)** as part of its efforts to secure financing and investment support.
Aurangzeb said the government’s broader objective was to gradually reduce reliance on bilateral external borrowing and shift towards **market-based financing with longer maturities**.
“We will go towards market-based financing and will rely less on bilateral support,” he said.
Pakistan currently has around **$12.3 billion in short-term debt owed to three bilateral creditors — Saudi Arabia, China and Kuwait**. Saudi Arabia has recently rolled over $5 billion until December 2028, while another $3 billion has been provided for three months. China continues to roll over around $4 billion annually.
The finance minister said Pakistan appreciated the continued support of its bilateral partners but wanted to reduce its dependence on short-term rollovers, which can constrain the country’s economic policy options.
### Plans for International Bond Issuance
Aurangzeb said the government had already appointed **three consortiums** to work on the issuance of Eurobonds, sukuk and dollar-settled rupee bonds.
The government intends to explore **five-, seven- and 10-year bonds**, depending on market conditions.
However, Pakistan’s relatively low credit rating remains a challenge in accessing international capital markets at competitive rates. Although the country was recently upgraded to **B**, the rating remains below investment grade.
During the last fiscal year, Pakistan raised **$250 million through a Panda bond**, backed by guarantees from the Asian Development Bank (ADB) and the Asian Infrastructure Investment Bank (AIIB).
The proposed US facility comes amid improving Pakistan-US relations and is being viewed as part of broader efforts to strengthen economic and diplomatic ties.
### Simplified Tax Scheme for Traders
During the event, Aurangzeb also formally launched a **simplified tax scheme for small traders**, aimed at bringing a larger number of retailers into the formal tax system.
Under the scheme, eligible traders can pay **1% tax on annual sales, subject to a minimum payment of Rs25,000 per year**, in exchange for simplified compliance requirements. They will also be offered exemptions from audit requirements, installation of digital sales machines and withholding-agent obligations.
The scheme applies to traders operating a single shop with annual sales of up to **Rs200 million**.
Minister of State for Finance Bilal Kayani said traders would be able to submit a simplified return through mobile devices. Participants will also be required to declare their assets, with assurances that they will not be asked to disclose the sources of those assets under the scheme.
FBR Chairman Rashid Langrial said the initiative could bring millions of currently non-filing traders into the tax net. He noted that around **4.2 million retailers have commercial electricity connections**, while trader representative Ajmal Baloch estimated the total number of retailers in Pakistan at around **12.5 million**.
Aurangzeb said the government would take appropriate action against retailers who continued to remain non-filers despite being offered the simplified scheme.
Under the programme, participating traders will receive a **tax plate to display at their shops**, while FBR officials will not be permitted to question traders who have opted into the scheme, according to Langrial.
The FBR chairman acknowledged that the complexity of income tax returns and concerns about harassment had discouraged many traders from becoming filers.
Aurangzeb also said the government planned to introduce a **simplified tax return for salaried individuals**, although FBR officials ruled out extending the traders’ 1% tax rate to salaried taxpayers.
Langrial said salaried individuals contributed around **Rs630 billion in income tax during the last fiscal year**, compared with significantly lower contributions from the trading sector.
Story by Shahbaz Rana
