Federal Finance Minister Shaukat Tarin has turned down the possibility of Pakistan’s exit from IMF programme.
Expressing his views during the session of Senate Standing Committee on Finance in Parliament House, Finance Minister Shaukat Tarin has clarified that it is impossible for Pakistan to exit International Monetary Fund (IMF) programme due to a financial gap of US$ 20 billion and various other strained economic indicators of the country.
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The IMF-provided loan programme was frontloaded under tough conditions as the discount rate was hiked to 13.25%, so the debt servicing doubled.
The committee was also informed that despite IMF’s demand, the government has refused to increase the burden on those who were already paying their taxes.
The finance minister highlighted that currently IMF programme has been temporarily halted as the sixth review under the Extended Fund Facility (EFF) will be accomplished in September 2021 instead of July as scheduled earlier.
Sources say that Pakistan has forwarded its desire to combine the sixth and seventh reviews jointly under EFF in September 2021.
Shaukat Tarin also apprised that the government would rewrite powers of the FBR to arrest and prosecute taxpayers involved in hiding their income.
Responding to a query from a committee member, finance minister stressed that government was obtaining loans to repay the past ones with GDP ratio reduced to 86% than the previous 89%.
Addressing the issue of revenue generation, Tarin revealed that despite the fact agriculture accounts for 22% of the GDP it is out of the tax net.
The agriculture sector has the potential to generate Rs 60-70 billion in income taxes, he said.
