Covid onslaught threat to Pakistan’s economic recovery: Shaukat Tarin
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Addressing a news conference, Shaukat Tarin said the country is facing a string of challenges including the current account deficit with a trade gap of $20 billion alongside debt payment issues, which compelled the government to approach the International Monetary Fund (IMF).
“However, this time around the environment was not the same as it was in 2008 when I went to the IMF,” he said. “The current IMF programme was quite difficult and such conditions were attached, which has a political cost as well. However, the present government was able to follow the stringent conditions of the IMF and was able to move the economy towards stability and it was time to move towards growth,” he remarked.
Tarin said that Pakistan will not leave the IMF programme, and the programme is ongoing, but the IMF has been told that we need to be facilitated due to the third wave of Covid-19.
“We told the IMF that 92 percent of the revenue target was being collected, however, due to the third Covid wave, the collection has come down to 57 percent. We will increase the tax net, but we have told the IMF not to give us the revenue target,” he said.
"Our philosophy is that we have to move from the stabilization phase towards growth mode. In order to achieve this growth, we need to incentivize industries, agriculture, and the housing sector in order to generate employment and bring growth," he said.
Tarin said that the Prime Minister was concerned about bringing the inflation down for the common man, for which he was paying attention to the extraordinary difference in price margins between farmers and retailers.
“Our common man is facing hardships due to inflation. Hiking electricity rates has a direct impact on inflation,” Tarin said, adding “Increasing power rates is not the only answer to growth in revenue.”
He said Prime Minister Imran Khan is also not in favour of increasing powers rates, stressing the need for cutting down on circular debt.
The minister said that the government will soon launch the Kamyab Kissan programme, saying that the Kamyab Kissan programme is essential for grassroots development.
Tarin said that agriculture, which is stagnant from past 15 years, is most important industry of Pakistan and government would have to take steps for its promotion. IT sector can also become a game changer in next 5 -10 years, he added.
He stressed on giving more importance to CPEC and said that China has spent a massive sum on infrastructure of Pakistan and government is also asking the country to set up its companies in Pakistan.
Talking about issues faced by taxpayers, Tarin said that the Board of Revenue (FBR) did a good job but some cases of harassment were also reported and meanwhile the NAB has no idea about some issues too. “We will have to convince NAB on how things work,” he added.
He further added that in next budget, it will be ensured that people who become taxpayers do not face any harassment.
Tarin said revenue collection grew by 57 percent in April. “In March, revenue collection rose 46pc as compared to last year’s corresponding period. Revenues were projected to grow by 92pc in April as compared to last year but registered 57 growth due to the Covid-19 pandemic.”
He said the FBR has done some good work to enhance revenue collection. However, he added, more programmes will be announced in the next budget to eliminate harassment and to encourage people to pay taxes.
The minister said it is our target to further expand the tax base. He said the country’s exports are not growing due to multiple factors. “We also want to bring foreign direct investment in the export-oriented industries to bolster our exports,” he added.