IMF option only if trade deficit not controlled: Miftah

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KARACHI: Finance Minister Miftah Ismail is addressing a post-budget seminar at ICAP.
KARACHI: Finance Minister Miftah Ismail is addressing a post-budget seminar at ICAP.

KARACHI: Federal Finance Minister Miftah Ismail said if the government fails to curtail trade deficit, the country will have to resort to the International Monetary Fund (IMF) for financial assistance.

Addressing a post-budget seminar organised by the southern regional committee of the Institute of Chartered Accountants of Pakistan (ICAP) on Monday, he said with the measures PML-N government has taken, there would be no need to resort to the IMF programme.

“I am leaving the goods in order by May and if the next government (caretaker) keeps the things as normal by June, we will not be required to go to IMF,” he said.

“If we do what the IMF wants us to do then there will be no need for the programme. We need to correct our financial affairs before IMF’s extortion by increasing exports and reducing imports,” he emphasised.

According to a press release, Miftah said whatever anomalies are in the budget would be fixed within two weeks. The government has reduced tax rates and now everybody will have to come into the tax net. Only 1.2 million out of total population of 200m people currently pay tax.

The tax relief provided to the salaried class would reduce government’s revenue but would have long term impacts as more people will opt to come in the tax net, he added.

The Federal Board of Revenue (FBR) is estimated to collect Rs3,935 billion revenue in the current fiscal year ending on June 30. “We have more than doubled the tax collection during the last five years. For 2018-19, we have set Rs4.45 trillion collection target,” he said.

Miftah said the government is targeting the inflation rate to be six per cent for the next year, growth at 6.15pc and 11pc increase in revenue.

He stressed the need to raise growth rate to 8-10pc to alleviate poverty from the country and create job opportunities as other now-developed countries did.

With regards to the export package, he said a committee would be notified within couple of days.

Chairman Fiscal Laws Committee ICAP Ashfaq Tola said that there are few anomalies left in budget that need to be corrected. ICAP is doing its best efforts and we have held marathon session with FBR and submitted our proposals. The FBR has accepted many of them, he claimed.

Published in Dawn, May 2nd, 2018