KARACHI: Adviser to the Prime Minister on Finance Hafeez Shaikh on Saturday said the government is spending Rs250 billion to improve efficiency in the power sector.
“Traders, industrialists and businessmen are the backbone of the economy,” Shaikh said, addressing members of the Overseas Investors Chamber of Commerce and Industry.
PM adviser said the government is taking tough decisions. “Traders should not be worried about CNIC card condition,” he said, He was referring to a restriction on suppliers to obtain computerised national identity card from buyers that make a transaction over Rs50,000. “Economic growth is not possible without broadening the tax base,” he added. “Tax system will not be improved until documentation of the economy.”
Shaikh said signs of economic turnaround are emerging due to efforts of the present government for the revival of the economy. Exports started to increase due to government’s efforts, he added.
The adviser said the present government took various steps, including measures to deal with current account deficit and improve tax collection, to revive the sluggish economy.
“There is zero tax on exporters,” APP reported the adviser as saying. “However, taxes have to be paid on local sales.”
Shaikh said overall tax revenue grew 16 percent, while inland revenue collection increased 21 percent during the first four months of this fiscal year. Total 1.9 million people were brought under the tax net in 2018 and this figure increased to 2.7 million in 2019.
Shaikh said the government recently announced Rs200 billion subsidy package to facilitate exporters. “Thrust is being shifted from cheaper imports to benefits to exporters.”
PM adviser said the government offered a lot of concessions to traders. “There is a need to start from somewhere in respect of the documentation of economy.”
Shaikh said renewed documentation drive from January next year is going to be challenging, but there is need to stay on course. “The country’s willingness to self-discipline is being acknowledged, and the International Monetary Fund has also expressed satisfaction over the steps for economic stability.”
The adviser said the government announced various programs to help vulnerable segments mitigate impact of inflation. “Many subjects of quality life such as healthcare, quality education, poverty alleviation and women protection come under the ambit of provincial governments.”
Shaikh said the federal government doubled the budget to expand social safety net program to provide relief and improve the quality of life of poor segments of the society. The government brought down its expenditures compared to the last year.
The adviser said the government has not borrowed any money from the State Bank of Pakistan for the last four months.