By Ali Imran
ISLAMABAD: Finance Minister Shaukat Tarin on Monday hinted at renegotiating an agreement with the International Monetary Fund (IMF), saying that the Fund has committed injustices to them and they will take up matters with them.
Addressing a meeting of the National Assembly’s sub-committee on finance, Shaukat Tarin said that they would take up the matter regarding increase in tariff with the IMF as it could lead to further inflation in the country.
He further lamented that maintaining the interest rate at 13.25 percent was a grave mistake besides also announcing to privatize institutions that the government is unable to run. “The growth rate will improve with the moving economy,” he said while stressing the need to broaden the tax net in the country.
“We could not force people to pay more taxes,” he said. He said that agriculture and industries could improve the country’s economic growth. “Pakistan only spends 0.25 percent of its GDP on the housing sector,” the finance minister said while emphasizing the need to improving the living standard of the public. He said that there was a lack of planning regarding the economy in the country and suggested introducing a comprehensive mechanism for 20 to 30 years for stable economic growth.
Shaukat Tarin shared that 85 percent of the country’s income is spent in nine cities of the country. “What is the fault of people living in Khyber Pakhtunkhwa (KP), Balochistan and South Punjab,” he asked. Last year on September 10th, IMF had asked the Pakistani government to increase the prices of gas and electricity for consumers in order to achieve the tax collection target set for the fiscal year. In a meeting with Pakistani officials, the global lender asked the authorities to decrease the circular debt and electricity losses.
If Islamabad goes ahead with the move then it would add an extra burden on people already suffering due to the economic fallout of the coronavirus pandemic.
Earlier in September, Prime Minister Imran Khan had rejected a hike in petroleum products for the current month to provide financial relief to the masses amid high food inflation and heavy rains in the country which would incur a Rs17 billion revenue loss to the government. According to report, the IMF also asked the government to allow the National Electric Power Regulatory Authority (Nepra) and Oil and Gas Regulatory Authority (Ogra) to decide the prices of the essential products.
It also urged the government to implement economic and tax reforms and emphasised that tax collection target for the first quarter (July-September) of the ongoing fiscal year must also be achieved.
The IMF asked Pakistan to collect over Rs1,000b in the form of taxes during the said period. Last year, the global lender had approved $6b bailout package for Pakistan under the Extended Fund Facility after the country agreed to enforce flexible exchange rate, enhance taxes and end circular debt.
