KARACHI: Adviser to Prime Minister on Revenue, Finance and Economic Affairs Dr Miftah Ismail on Saturday said Pakistan’s economic fundamentals are very strong and the GDP growth is likely to hit a 10-year high of 6 per cent this year.
He was addressing at a panel discussion organised by Institute of Chartered Accountants of Pakistan (ICAP). The panellists included ICAP former president Asad Ali Shah, ICAP Taxation Committee Chairman Ashfaq Tola, former finance secretary Waqar Masood and Arif Habib Limited CEO Arif Habib. The moderator of the discussion was Pakistan Business Council CEO Ehsan A Malik.
Dr Miftah Ismail said the economic growth remained buoyant. However, the fiscal deficit and current account deficit were bothersome. He said there is need to curtail budget deficit around 5 per cent this year in order to create fiscal space for development expenditures.
Talking about planned amnesty for undeclared foreign assets, he said there were misconceptions about this amnesty. “Through this amnesty, the government is trying to stop all the continued amnesties on the transfer of foreign remittances,” he added.
He said that the current account deficit has reached alarming levels due to lower exports and high imports. The adviser admitted the government’s weakness in maintaining real nominal exchange rate for a long time.
Miftah added the exchange should be decided by the market forces instead of the regulator.
Dr Miftah said the government will clear all sales tax refunds and customs rebates of exporters by February 15, 2018, and from the next budget, the government will formulate policy to avoid generation of refunds.
He also said the government had introduced many initiatives including levy of regulatory duty to discourage import of unnecessary and luxury imports. He, however, said the government was considering to withdraw regulatory duty on many items in the upcoming budget.
He said that broadening of tax base was a priority of the government and in this regard, many sectors had been identified.
Earlier, in his welcome address, ICAP President Riaz Chamdia said there is a need to resolve problems in the economy, such as tax refunds and circular debt. He stressed the need for enhancing tax base for better revenue collection. He further said there is need to focus on new industrial zones.
Riaz Chamdia said the development of Gwadar port will benefit the national economy.
Ehsan Malik, on the occasion, said the share of the manufacturing sector was depleting which needs attention. To increase the share the government should focus on trade, manufacturing and energy policy, he suggested.
Arif Habib in his remarks suggested reducing the cost of doing business. He also suggested incentives for business activities and investment in the stock market.
Asad Ali Shah said one-time amnesty should be extended to foreign and local undeclared assets. Ashfaq Tola explained many areas which required the attention of the government to reform taxation.
Meanwhile, Waqar Masood gave details about Pakistan’s loan programmes with IMF.