ISLAMABAD: Federal Finance Minister Miftah Ismail, said that revenue generating measures introduced in the federal budget 2018-19 would help the government avoid any bailout package from the International Monetary Fund or from any other financial institution.
The government had introduced the measures in currency market for economic uplift in last December; therefore, the federal government has no plans to approach the IMF for a bailout package before the end of its tenure. The government had secured a $1 billion financing today and it would raise the level of forex at the State Bank of Pakistan.
In July 2013, Pakistan asked for a new $5.3 billion bailout loan program from the International Monetary Fund after talks with a visiting delegation from the global lender. Pakistan and International Monetary Fund reached an agreement for a three-year program of at least 5.3 billion dollars under an extended fund facility.
Pakistan entered into an extended fund facility (EFF) program with IMF on September 4, 2013. It was a 36-month extended arrangement under the EFF for $6.64 billion, 425% of quota). First tranche of $544.5 million, 34.8% of quota) became available on September 6 2013.
Addressing the post-budget press conference along with Special Adviser on Revenue Haroon Akhtar Khan here, Finance Minister claimed that the budget for next fiscal year had been prepared by all departments of the government jointly and congratulated them for their efforts.
The government expected the GDP’s nominal growth to be slightly above 12% next year, but tax revenues were estimated to go up by 11% only. So we are very confident that we will achieve the 11% growth.
He said that Federal Board of Revenue’s (FBR) visionary policies aimed to facilitate the people. The FBR revenue has doubled with a growth of 20% so the government also focused on the major steps taken on the income tax. Super tax is 1%, 3% for corporations and 4% for banks. The current government has led to a 5% decrease in taxes at the rate of 1% per year and it would be further lowered.
Similarly, he said that the relief measures in the budget were accompanied by tax measures, aimed at facilitating existing and new taxpayers. The government doesn’t expect issuance of many supplementary grants during the year because all actual expenses have been counted in the budget.
Miftah said that export promotion needed to increase and import dependency needed to crack. Therefore duties on raw materials were lowered to protect the local industries. The budget looks out for the local industries. Tax on the film industry, car production, LED lights, port of coal, custom duties, sales tax on firefighting vehicles due to their high demand has been reduced to 10%. Miftah said that taxes on cigarettes, cement and steel increased to meet the revenue target by the tax authorities.
Speaking on the occasion, Special Adviser to Prime Minister for Revenue Haroon Akhtar Khan praised the Federal Board of Revenue (FBR) officials for working day and night to produce a progressive and visionary revenue document. The PML-N government is ending its five-year tenure with FBR’s revenue increased by more than double and a simple growth of 15.5%.
Khan said that provinces were paid Rs1.3 trillion from the divisible pool in 2013 and they would receive over Rs2.3 trillion this year. Rejecting the impression that the budget was not a revenue budget but a give, give and give budget, Khan said that it was a well-thought-out budget and cited several additional duties and taxes as proposed revenue measures in the document.
He said that the government had taken two major steps to improve the current account deficit: it announced an export package that helped trigger exports and increased them by 13% in the last nine months and imposed a regulatory duty on luxury items. The government also resorted to currency devaluation twice in order to deal with the issue.
