ISLAMABAD: The Statistics Wing of the Federal Board of Revenue (FBR) is publishing biannual reviews and quarterly reviews containing monthly data on stock of outstanding tax refund claims, including sales tax, income tax and customs duty.
Sources told Customs Today that it is indicated in the IMF staff review report. However, discrepancy between FBR data and that of refund claimants is more than Rs 200 – a fact that compromises claims of meeting the revenue targets the focus on deficit reduction at the cost of growth continues and the review notes that the government remains committed to a deficit reduction.
Sources said that review report had inexplicably maintained that in Pakistan there is no linkage between growth and deficit reduction, and the acknowledgement that there is reliance on provincial surplus to meet the budget deficit.
The Fund staff’s treatment of the China Pakistan Economic Corridor (CPEC) is blatantly inconsistent. The review notes that the new framework for public private partnerships (PPPs) can foster much needed investments while allowing for adequate management of associated financial risks – a framework that was inserted as a new structural Fund imposed benchmark earlier this year at almost the tail end of the programe with a technical assistance released in haste to take account of projects under CPEC which, as per China’s requirements, entailed significant departure from public procurement rules and regulations.
The review then goes on to acknowledged that “CPEC related imports would widen the current account deficit to 1.8 percent of GDP” from 1 percent of GDP and added that “long term risks could arise from repayment obligations and profit repatriation related to large scale investments such as those under CPEC underscoring the need for careful coordination and monitoring”. This no doubt compromises the government’s stated stance on CPEC being entirely a PPP with no implications on debt.
The government, in its Letter of Intent, informed the Fund that a fiscal coordination committee comprising of provincial and federal finance secretaries has started operating, a more appropriate membership would have consisted of the FBR and their provincial counterparts, and claimed that it meets on a quarterly basis to coordinate fiscal policy – a claim that is astounding given the budget’s proposal to designate provincial tax authorities as withholding agents and directing them to deduct taxes on those who file sales tax returns but are not income tax filers – a measure that was withdrawn after much hue and cry in the standing committee on finance.
