Govt in constant touch with IMF: Pasha

ISLAMABAD: Minister of State for Finance Dr Aisha Ghaus Pasha said that the government was constantly in touch with the IMF and did not want to de-track from the Fund programme.

She said that the government paid heavy political costs for the revival of the IMF programme and the Prime Minister wants to see revival of the IMF programme.

While talking to the media after attending Senate Standing Committee on Finance meeting which met under Chairmanship of Senator Saleem Mandviwalla here on Wednesday, the Minister of State for Finance said that they were in constant touch with the IMF. She said that the government was moving forward for giving response on the queries raised by the IMF.

“We want to stay on the board. We moved forward and paid heavy political cost attached to the Fund programme. We want to remain in the IMF programme. When people had sacrificed and government paid heavy cost so why we should de-track the IMF programme,” she added. Aisha Ghaus Pasha said that they wanted to sign the agreement with the IMF and both PM and finance minister wanted to remain in the IMF programme. She said that the biggest relief to the people in the next budget would be to control the yawning budget deficit because avoiding further loans is the biggest relief as borrowing to finance the deficit would further fuel inflation.

Earlier, in the senate panel meeting, the Minister of State for Finance said that the crypto currency could not be allowed as the country had come out from the FATF grey list. The representative of State Bank of Pakistan informed the committee that it cannot be permitted in the country.

Many developed countries had slapped ban on crypto. Senator Farooq H Naek proposed that the banning of digital currency should be introduced in the coming finance bill 2023-24.

The committee while taking briefing on the crypto currency debated that may be some momentary speculative gains be associated with crypto currency trading but there are no substantial national-level economic benefits.

The SBP official said that keeping in view a number of frauds reported through crypto currency including $2 billion fraud in Turkey by an exchange named Thodex, and losses of $650 billion , the second largest crypto exchange bankruptcy in November 2022. the SBP in 2018 prohibited its regulated entities from dealing virtual crypto currency. The committee emphasised that digital financing should be banned and penalties should be imposed. It was also stressed that legislation should be framed and given a legal enforcement.

While taking briefing by the FBR on the capital Value tax on local and foreign assets of taxpayers introduced in the Finance Act 2022. It was briefed that CVT is levied on foreign assets of resident individuals exceeding rps 100M in value, and motor vehicles exceeding battery power of 1300 cc/ 50 kWh similarly the value of assets to be determined in case of foreign assets is the total cost of foreign assets on the last day of the tax year converted into Pakistan Rs at SBP notified exchange rate as on 30th June, 2022. It was briefed that collection of CVT of Rs3,194 M and 6,045 M from foreign assets has been made since the operationalising of this law.

It was briefed that as a result of tax policy shift the direct tax collection has for the first time surpassed all individual indirect taxes as direct tax (Income tax/CVT) 45 percent, Sales tax 42 percent and custom duty 13 percent. Aisha Ghaus Pasha, State Minister for Finance said that this has been tried earlier but was not workable. The chairman of committee called for an in-camera meeting to take briefing on all such regimes and its implementation mechanism.