Adviser to the Prime Minister on Finance and Revenue Showkat Tarin on Friday assured that the government will not increase taxes in the supplementary budget it plans to present in the National Assembly. a settlement with the International Monetary Fund (IMF) earlier this week.
However, some exemptions will be withdrawn, he shared while talking to the media in Karachi.
When a reporter asked the consultant to comment on the mini-budget, Tarin remarked that it seemed the reporter wanted to sensationalise. “Taxes will not increase. Some exemptions will be withdrawn.
“In March, the government had signed for [removal of] 700 billion rupees discount and [imposition] of new taxes, after which he received $500 million,” he recalled.
he was referring to release A mechanism set up by the IMF in March for a further automatic electric power tariff hike of $500m after the government’s decision to roll back corporate tax exemptions approved four pending reviews of the country’s economic progress.
“When I arrived [as finance minister], I said that we will not allow increase in taxes. we will not allow [the IMF] To impose more taxes on those who are already paying them.”
The advisor said that his ministry stood by its stand of not increasing taxes during talks with the IMF.
Tarin said the IMF questioned why Pakistan distorted its tax system, adding that the fund’s argument had merit. “They say, ‘You put a 17 percent sales tax on something’ [sectors], zero on some and 10pc on others. Get your sales tax and give them targeted subsidies [instead],
Talking about the fertilizer industry, the Advisor said that the government provided subsidized gas to the companies and also did not levy any tax. The combined subsidy provided to the fertilizer industry was around Rs 150 billion, he questioned: “Is it reaching our farmers?”
He said that the government would use the Ehsaas database to directly disburse the subsidy to the farmers.
‘Rupees will go both ways’
The advisor criticized those who were speculating about the exchange rate.
“It was said earlier that [rupee] Was falling because of no deal with IMF. negotiated […] The benchmark is the real effective exchange rate. It compares your currency with the currency of your competitors and says that your exchange rate should be approx. [the specific figure], Experts say that according to the real effective exchange rate, the rupee [be traded] About 165 or 167 or 168,” he explained.
He refuted rumors that the rupee would be demonetised, asserting that the government would not take any such step that would affect the confidence of businesses or create distortion in the market.
“We are taking some steps, which will move the rupee to the other side,” he said. They (the bookmakers) will lose badly, so don’t get into such speculations. Rupee will go both ways.
agreement with IMF
On Monday, the IMF had announced that it has reached an agreement with Pakistan on policies and reforms needed to complete the sixth review under the $6 billion Extended Funds Facility (EFF), which will take a ‘vacation’ from April. is in.
The IMF said the agreement is subject to approval by the Fund’s Executive Board, following the implementation of prior actions, in particular on fiscal and institutional reforms. It said approval of the agreement would provide $750 million in special drawing rights (SDRs), which is equivalent to $1,059 million.
The SDR is a basket of mixed currencies provided to the member countries of the IMF.
In a press conference on the same day, Tarin gave a Announcement About the ‘five prior actions’ needed to secure IMF Board approval. Those actions include a 22 per cent cut in development funds for a net fiscal adjustment of about Rs 550 billion during the remainder of the current fiscal year, an increase in tax targets by about Rs 300 billion and a monthly increase in petroleum levy by Rs 4 per liter. Petroleum products.
Tarin said the government would also ensure Parliament’s “approval” to grant autonomy over matters of monetary policy, exchange rates and recruitment to the State Bank of Pakistan (SBP), which would remain accountable to Parliament as it is now.