ISLAMABAD: Finance Minister Shaukat Tarin said has that Pakistan had informed the International Monitory Fund (IMF) that increasing taxes or tariffs was presently impossible under the IMF programme and the demand to increase electricity tariff is unjustified.
In his first media briefing flanked by Special Assistant to the Prime Minister (SAPM) on Revenue, Dr Waqar Masood, and other officials on Wednesday, Tarin said, “We will refuse the IMF’s demand to boost the power tariff because our nation is fed up of inflation.”
The finance minister Pakistan has not yet come out of the IMF program, Pakistani officials informed them that county’s revenues were increasing at 92 percent but the third wave of Covid has caused some decreases.
Tarin said that streamlining revenue and power sectors are important challenges but inflation would have a cascading effect. The finance minister maintained, “We will increase the tax network to achieve the desired targets.”
Talking about taxation, the minister said its ambit would be further increased through pioneering methods whereas the tax-to-GDP ratio would augment every year by one to two percent. He said, “The abrupt increases on the orders of the IMF, as done in 2019, would not happen. This is the wrong way of doing it,” he added.
As a substitute, Tarin opinioned gradual annual increases would be the better technique to go and efforts would be made to convince the IMF about it.
Over 90 percent of programs of the organization fail because of its tough conditions and went on to add that there is a political price of signing a deal with the IMF, he observed. The government entered into an agreement with the organization despite tough conditions which previous governments had not been asked to fulfill, he added.
The finance minister said, “We desire the IMF to fill the gap left by the $20 billion deficit, and complied with the program. Although I think the government, despite those strict conditions, followed it and went towards stability,” he added.
Talking about economic activities linked with the development of projects under the China Pakistan Economic Corridor (CPEC), he said that since a number of Chinese companies are relocating their units to various countries of the world, the government would request them to relocate some industries to Special Economic Zones (SEZs) in Pakistan.
About reforms in State-Owned Enterprises (SOEs), he said the private sector would soon be given control of the entities. Tarin also announced to start the Kamyab Kisan program aimed at incentivizing farmers as existing incentives for the agriculture sector had negligible trickle-down effects.
Talking about the rising inflation, the finance minister claimed that middlemen in the business of agriculture goods were pocketing over 35 percent of the price being charged to consumers. He said strategic reserve centers would be established to ensure farmers are not blackmailed as price stability is imperative.
Regarding his plan in the banking sector, the finance minister said that banks would be asked to increase the number of lending. “Banks in KP, despite being facilitated by the government are lending Rs50 billion out of Rs600 billion capacity,” he added.