Moody’s on Thursday said that government’s revenue base will increase if Pakistan’s tax-amnesty scheme proves successful.
Moody’s International assessed that the new scheme launched by Prime Minister (PM) Abbasi could lessen fiscal pressure on the government for low revenue generation and also help increase capital expenditures for China-Pakistan Economic Corridor (CPEC).
The statement said that the scheme was likely to ease the balance of payments pressure by declaring undeclared domestic and foreign assets. Moody’s claimed that this scheme was Pakistan’s first scheme targeting foreign assets which probably would be a success with its low penalty rates.
It further said that Pakistan’s government had not recorded a fiscal surplus in the past 25 years, and thus this scheme might help increase Pakistan’s credit profile.
The international rating agency revealed that State Bank of Pakistan had allowed depreciation of Pakistani rupee by about 9 percent with a total interest rate raised by 25 points to calm domestic demand.
The report stated that the forex reserves continue to decline and have reached a low point in March.
Earlier this week, Prime Minister Shahid Khaqan Abbasi had announced a five-point tax reforms package, detailing a tax amnesty scheme for undeclared domestic and foreign assets as well as a decrease in income tax rates.
Moody’s is an international credit and financial rating agency that aims at keeping transparency in the global financial integrated markets.