ISLAMABAD: Federal Finance Minister Shaukat Tarin said on Wednesday Pakistan would ask the IMF to be soft on envisaged targets without hiking power tariff and slapping additional taxes.
He said that Pakistan would not exit from the IMF Programme but would make an effort to convince the Fund on adopting a lenient view. The IMF and World Bank had so far been sympathetic, he said.
“We will achieve the targets envisaged under the IMF Programme with our own devised strategy as instead of doing away with exemptions, we will broaden our tax base by bringing new taxpayers into the system,” he said.
About autonomy to the SBP, he said that some overdue was done so the parliament would help strike a balancing act on the SBP Amendment Bill 2021. “We will ask the IMF for achieving targets with our own strategy as more tax revenues will be collected without additional taxes and abolishing tax exemptions but it will be achieved through broadening the tax base. We cannot hike the power tariff because it will result in a surge in inflationary pressures. We will ask the IMF to review conditions that possessed a political cost,” Federal Minister for Finance Shaukat Tarin said in his maiden press briefing here at PID Center on Wednesday.
Flanked by Special Assistant to PM on Finance and Revenues Dr Waqar Masood, Finance Secretary Kamran Afzal and FBR Chairman Asim Ahmed, Mr Tarin said that there would be an alternative plan if the IMF showed reluctance to accept our strategy. He also hinted that the tax revenues would be increased but the FBR target would be lower than as envisaged by the IMF for next fiscal year. The resource envelops, he said, would be increased to utilize more on promoting the GDP growth trajectory.
The minister said that there was a need to reduce political temperature, as he enjoyed good relations with different political parties, including the PPP and others. He said that he had talked about the Charter of Economy and he would again talk about it. He said that he would make an all-out effort to bring about civil service reforms and pay for placement of performance package for bureaucrats. He said the system was in a halt mode at the moment so there was a need to make public sector as the employer of choice.
Refraining from criticising the NAB directly, Mr Tarin said that when he had joined Habib Bank Limited, he had found that of a total balance sheet of Rs113 billion, there was an amount of Rs68 billion in the shape of bad loans. So, he had decided to go after defaulters and created a separate arrangement to deal with these bad loans by cleaning its balance sheet. He said if he had focused on bad loans, he would have failed to deliver during his three-year stint. He said that there was a need to stop digging as bureaucrats were not taking decisions because of the NAB.
Shaukat Tarin said that he was an all-out supporter for independence of Pakistan Bureau of Statistics (PBS) and recalled that he had granted an autonomous status to the PBS during his last tenure as Finance Minister.
When asked about perception of tinkering with a methodology to show reduced CPI-based inflationary figures, he replied that the PBS was collecting price data from 35 cities out of which prices data was collected from 18 markets which were located just in two main cities, including 11 markets in Karachi and seven in Lahore. He said that he was the one who had ensured autonomy for the PBS by removing the control of the Finance Ministry. He said that he had now asked the PBS to diversify its data collection. He said that the government would go to the technical committee to convince them on ensuring a wide-ranging coverage. He made it clear that he would be the last person who was tinkering with the data collection methodology.
He said that the situation was quite different when he had negotiated with the IMF in 2008 but now the Fund Programme was front loaded where tough conditions were imposed. He said that if anyone wanted to jack up the FBR target from Rs3,850 billion to Rs5,555 billion, it was not the way to do things.
To another question about reducing power tariff to tackle the issue of capacity payment, he said that there was no leverage to convince the IMF on reducing tariff under the Fund Programme. He said they were facing problems to convince the Fund not to raise tariff at the moment.
He said that the third wave of COVID-19 pandemic posed new challenges but hoped that it would be overcome and economy would continue moving towards the recovery path. He said that the IMF Programme focused on stabilization but now focus would be shifted to the higher growth trajectory. He said that the PSDP allocation would be increased to spur growth.
