Karachi: Adviser to the Prime Minister on Finance and Revenue Shaukat Tarin on Friday downplayed the incidence of poverty in Pakistan, stressing that its rate has come down recently.
Speaking to reporters at the Pakistan Stock Exchange (PSX), Mr Tarin said the latest figures from the World Bank show that poverty declined to 4.2 per cent from 5.4 per cent a year ago. “Our problem is inflation, which has hit the lower middle class the worst in urban areas,” he said.
The advisor said rural areas were thriving as a bumper crop brought prosperity and led to ‘record sales of motorcycles’. He also believed that the middle and upper classes were doing well.
“The restaurants are full of people. Cars are getting expensive,” he remarked.
Reiterating his statement from two weeks ago, Mr Tarin again warned speculators in the forex market not to play with fire. “I warn speculators: Rupee will swing the other way too. We are taking some actions that will change direction [of the exchange rate movement]He also reiterated his claim that the rupee was worth about Rs 10 less.
Mini-Budget claim rubbish, only claim to withdraw some tax exemption
Although the exchange rate was above Rs 178 in the open market on Friday, the finance advisor insisted that its actual value should be Rs 165 to Rs 167 as per the actual effective exchange rate, a technical measure that measures the country’s currency against the weighted average. Compares the value of . of the currencies of its major trading partners.
tax exemption to be withdrawn
He objected to a reporter’s question about formalizing the impending ‘mini-budget’ policy measures The loan is being taken by the International Monetary Fund (IMF) under the soon-to-be-restarted loan program. “Don’t be sensational. There’s no mini-budget. Something [tax] The exemption will be withdrawn.”
Mr Tarin said he stood by his side and refused to impose new taxes, although the country’s economic team – under the erstwhile finance adviser – in its talks held in March this year agreed to a “relaxation and new taxes” of 700 billion rupees. “Signed for.
He said he agreed in principle with the IMF’s argument against tax exemptions. “What’s the point of distorting the system by imposing different rates of sales tax?” He said, noting that the incentives should be in the shape of targeted subsidy.
non-productive investment
The finance advisor vowed to introduce “some tax planning” primarily for the real estate sector so that non-productive investments “can be recycled into other sectors of the economy”.
In his speech to mark the first listing on the Growth Enterprise Market (GeM) board, which is a separate counter to PSX reserved for high-risk small and medium enterprises (SMEs), Mr. Tarin said the real estate sector will benefit. Must be aligned with those extended to other productive sectors of the economy. “We see an anomaly in the real estate sector when plots of land are bought and held for years. That productive capital sank,” he said.
He called for developing capital markets to ensure easy access for SMEs to funds in both debt and equity forms.
“SMEs are heavily dependent on the banking sector for their financing needs. But the footprint of banks on GDP is also only 33 per cent. Loan [as a percentage of deposits] Only 42 Pcs. This means that only 15 per cent of GDP is backed by banks,” he said.
Later, the Finance Adviser visited the office of the Pakistan Banks Association (PBA), according to a press release. It said the PBA has conveyed to Mr Tarin its concerns about the continuing ‘widening disparity’ between the lower tax rates on profits/dividends from investments in equity shares as well as units of mutual funds and the tax rates on profits from the bank. exposed to. The deposits are classified as ‘profit on loan’.
Regarding the PBA’s concerns regarding the disparity in the tax rate on banks and the continuance of super tax on banks in addition to the tax rate on the corporate sector, Mr. Tarin “understood and agreed to the PBA” and Promised to look into the matter. ,
According to a separate press release by the Central Depository Company (CDC), Mr. Tarin inaugurated the nation’s first Professional Clearing Member (PCM) at CDC House. The objective of the introduction of the PCM regime is to reduce the risk of custody default by transferring the custody of the shares to the PCM.
Published in Dawn, November 27, 2021