ISLAMABAD: Parliament Friday passed government's tax-heavy finance bill for coming fiscal year ahead of more talks on new bailout with International Monetary Fund (IMF) as it seeks to avert debt default for an economy growing at slowest pace in South Asia.

Addressing National Assembly, Finance Minister said that country's economic indicators are moving in right direction. "Our current account deficit has decreased significantly, fiscal deficit is under control, while currency has stabilised," said Aurangzeb."Inflation rate, which is dynamic in nature, has lowered from 38 percent to 11 percent. Economy has stabilised, and we are continuing with this stability to achieve further growth." He reiterated that tax-to-GDP ratio cannot remain at current 9.5 percent.

"It is completely unsustainable", he said, "and we need to increase it to 13 percent in coming three years".s"But we have taken important steps for next year, and have increased tax rates to punitive levels so that non-filer is compelled to pay taxes," he added. Rise in tax target is made up of 48 percent increase in direct taxes and 35 percent hike in indirect taxes over revised estimates of current year. Non-tax revenue, including petroleum levies, is seen increasing by whopping 64 percent. Tax would increase to 18 percent on textile and leather products as well as mobile phones besides hike in tax on capital gains from real estate. Workers will also get hit with more direct tax on income.