Dar claims he didn’t accept IMF demand for 18pc GST
43
ISLAMABAD: Finance Minister Ishaq Dar said in the Senate on Friday that the International Monetary Fund (IMF) wanted Pakistan to increase general sales tax (GST) to 18 per cent but he did not let it happen.
“We have been fighting with the IMF. They have not come from the heaven. (Woh Asmaan Se Nahin Utre) I know how competent they are,” he said.
The minister was responding to remarks made by senators during the debate on an adjournment motion about debt accumulation to a level where Pakistan would need $6.7 billion this year for debt servicing.
Also read: IMF approves $502 million tranche
Members questioned the logic of bolstering foreign exchange reserves and meeting fiscal deficit by more borrowing and warned that it would have dangerous consequences for the economy.
Mr Dar justified the recent decision to obtain a $500 million loan from the World Bank saying that it would have been criminal to decline to accept the ‘cheap money’.
Minister defends decision to obtain $500m loan from World Bank
He said the low mark-up loan would be payable in 25 years and countries looked for such loans.
He said the debt burden would continue to rise till the fiscal deficit was controlled. He asked political parties to discuss the matter with him and hammer out and own a charter of economy and a roadmap to come out of the debt trap.
“Let us de-couple economy from politics.
“Pakistan has a bright future if we put our heads together and jointly work on national agenda.”
He said the present government had cut expenses by Rs135 billion and done away with secret funds of 32 institutions which were now available only to two intelligence agencies.
Mr Dar said he did not want to indulge in any blame-game, but facts should be kept in view. When the present government came to power, foreign exchange reserves were enough only for nine days of imports, but now these were sufficient for four months, he added.
Winding up the discussion on the motion, he made it clear that the delay in announcement of the next National Finance Commission award (NFC) was not a constitutional violation. The commission is incomplete and a meeting can be convened only after it has representation from all provinces.
He reminded that the award had been delayed for 16 and 13 years in the past. The finance minister rejected the idea of setting up a permanent secretariat of the NFC.
Earlier, Sherry Rehman of PPP called for devising a plan to pay back loans, instead of piling them up to bolster foreign exchange reserves. She observed that the policy was affecting the purchasing power of the common man.
Shibli Faraz of PTI criticised the government for what he called its spending spree and questioned the rationale for projects like metro bus in the present circumstances.
The Senate unanimously passed the Anti-Money Laundering (Amendment) Bill, 2015.
The bill is different from the one earlier approved by the National Assembly to the extent that it would not cover tax-related offences.
The bill will now be sent to the National Assembly which is most likely to approve it as amended.
Published in Dawn, November 14th, 2015
