Daily Times

ISLAMABAD: Newly appointed Finance Minister Dr Miftah Ismail Saturday said the incumbent government had no intention to seek any bailout package from the International Monetary Fund (IMF) as an effective strategy had been put in place that would help improve the state of national economy.

“We have no intention to go for the bailout package. Measures taken by government since December last year including changes brought to currency markets will help us avoid seeking another bailout. Efforts are being made to avoid it,” he told a post-budget press conference along with Special Assistant to Prime Minister on Revenue Haroon Akhtar and senior government officials.

The minister dispelled the impression that the government eyed on the upcoming election in the fiscal plan and said the federal budget for the year 2018-19 was balanced and focused on maintaining growth momentum gained during the last five years.

He said the government had secured $1 billion financing which would help raise the level of foreign exchange reserves. He expressed the confidence that foreign exchange reserves would further improve in the coming days due to prudent policies introduced by the government.

Answering a question about increased circular debt, Miftah Ismail said the government had added over 12,000 MW to the national grid during the last five years, which was a record in the country’s history. He said the increased power generation caused surge in the circular debt, adding that government was making efforts to clear the circular debt judiciously. “Rs 100 billion would be released to the independent power producers (IPPs) soon and the remaining amount would also be cleared at the earliest,” he revealed.

Advisor Haroon Akhtar while speaking at the press conference rejected the misconception that the current budget didn’t focus on revenue generation, saying the government had introduced many initiatives in this regard.

The advisor said the super tax had been proposed to be continued for the financial year 2018-19, however its rate might be reduced by 1% for both banking and non-banking companies.

The super tax, he said, was imposed in 2015 for the rehabilitation of internally displaced persons, which continued in 2016 and 2017. Currently it was being charged at 4% on banking companies and 3% on non-banking companies, generating over Rs 500 million income, he added.

He said the government would impose tax on remittances of more than Rs10 million in case their sources of earning were not justified. He said the FBR had an agreement with NADRA for information sharing which would help expand the tax-base.

To a query, the adviser said to improve the situation of current account deficit, the government had given an export package in its earlier budget plan that greatly helped in triggering the exports. He said the government has taken two major steps to improve the current account deficit: it announced an export package that helped trigger exports and increased them by 13 per cent in the last nine months and imposed a regulatory duty on luxury items. The government also resorted to currency devaluation twice in order to deal with the issue. “If exports growth continued at the same pace, we will have no need to go to anyone for financial assistance. There is no need to be panicked.”

Replying to a question about the construction of sports stadiums, Miftah Ismail said that it was a project of the Planning Commission, who, in consultation with the ministries concerned, had decided the locations for setting up sports facilities in the country. “So, Finance Ministry neither takes any decision nor gives any dictation in this regard.”

To a question regarding petroleum levy, the minister said the PML-N government had presented a realistic budget. Petroleum prices in Pakistan were at the lowest level among oil importing countries, he added.

Haroon said the Federal Board of Revenue (FBR) had taken visionary measures to facilitate taxpayers. The selection for audit in respect of all three taxes – income tax, sales tax and federal excise duty – had been made risk-based and a case would not be audited more than once in three years for each tax, he added. The salaried class, he said, had been exempted from any audit.

Published in Daily Times, April 29^th 2018.