Finance Minister Shaukat Tarin said Pakistan can’t leave the International Monetary Fund (IMF) program at a time when the economy is recovering.
“It’s not possible to get out of the IMF program right now,” Tarin said, adding “We were forced to turn to the IMF.” “This time, the IMF was not friendly with us and the program was initial and difficult,” he said, still comparing previous programs with lenders.
Opposition parties blamed the government that the 2021-22 budget is replete with fiscal measures suggested by the IMF, which are anti-poor and will increase consumer inflation.
But he said the energy sector measures will be sustainable – and will increase revenue. “This is what the IMF wants from Pakistan.”
Tarin said the country urgently needs inclusive and sustainable growth, for which we need to increase revenues and promote productive sectors, including agriculture.
Moreover, The minister informed the committee that the government estimates that the economy will grow 7% until fiscal year-23 when the country will go to new elections with a projection of 5% to 5.5% for 2021-22.
On the issue of empowering the income tax officer to arrest any tax evaders, Mr. Tarin said that the FBR’s authorization to make arrests is not intended to make arrests. “The purpose of this law is to create fear among defaulters,” he aded.
Under the proposed plan, the minister said the government will take steps to increase the tax/GDP ratio by 1% each year. If these measures had been taken earlier, the tax revenue would have exceeded Rs 10 billion, he said.
The tax rate is currently at 10% and would increase to 11.5% next year as the government was using technology and innovations to broaden the tax base.
According to him, FBR obtained data on the profile of 7.2 million people, who would be sought out to pay the tax. He mentioned that there were some sectors like agriculture and retail where the tax base could be increased.
Membership Policy FBR informed the committee that the government had abolished all reduced sales tax rates on non-essential and luxury items, which were improperly taking advantage of the concessionary sales tax regime.