ISLAMABAD: Federal Minister for Finance and Revenue, Shaukat Tarin, has hinted at renegotiating the International Monetary Fund (IMF) programme.
During the National Assembly Finance and Revenue Committee meeting on Monday, Tarin said that IMF’s demand to raise electricity tariff is unreasonable and argued the hiking the tariff will only increase corruption in the country, adding that he is trying to convince IMF that the tariff hike is causing inflation while the country grapples with the third wave of the coronavirus.
“We have assured IMF of reducing circular debt but demand of increasing tariff is not understandable,” he said.
Tarin said that the lending organisation’s terms and conditions can also be fulfilled if the government curtails circular debt through other means instead of increasing the tariff.
He said that he does not believe in an increase in taxes and would rather prefer bringing more people into the tax net and updating audit procedures.
“Financial and monetary wallets are open all over the world but the IMF’s sword is only hanging over us,” Tarin added.
Furthermore, he admitted that the state-owned entities (SOEs) that the government was unable to run in the public sector would be privatised and agreed that sales tax system would have to be improved.
“The 17 per cent General Sales Tax (GST) rate is very high and a mechanism has been prepared for its reduction,” he said.
Speaking about stabilising Pakistan’s economy, the finance minister said that that even 4 to 5 per cent economic growth is enough for the country whereas the government will now be putting in tangible efforts to achieve this target.
He regretted that the government is spending 85 per cent revenue on only nine cities and rarely invests in education and health.
Unless the country moved to higher economic growth, nothing would improve and if we continue with stabilisation that has been in place for over two years, neither revenue collection would go up, nor job opportunities would be available to people or productive capacity of the economy could improve, he explained.
He also criticised the high policy rates of the State Bank of Pakistan (SBP). It was a mistake to keep policy rate at 13.25pc in the past, he said.
He said the government would increase the Public Sector Development Programme (PSDP) in the next budget and provide equal growth opportunities to all provinces.
As the country lacked proper planning, he said that he had selected 10 to 12 sectors on which economic experts had already started working so that they could come up with long-term planning for areas such as price stability, agriculture, industry, revenue, housing, social protection, national services, debt management and privatisation of loss-making state-run entities.
On the occasion, member of committee, Ayesha Pasha, suggested the need to revisit the budget strategy paper to which Shaukat Tarin agreed and said that he would come back with a revised budget strategy paper for consensus among all members.
The committee chairman assured the finance minister of all cooperation by committee members.
If Mr. Tarin can pull this off, this will be a huge feather in his cap. It will lessen the burden on Pakistan’s debt repayments and more funds can be ploughed back into the economy’s development strategy and implementation. May Allah Ta’ala help[ you Mr. Tarin as long as your clear-cut efforts are there. Salams