Govt not go­ing to IMF for any bailout: Fi­nance Divi­sion spokesman

Daily Messenger - - Biz -

IS­LAM­ABAD: A Fi­nance Divi­sion spokesman on Wed­nes­day clar­i­fied that the gov­ern­ment was not go­ing to In­ter­na­tional Mon­e­tary Fund (IMF) or any other in­ter­na­tional or­gan­i­sa­tion to seek any fi­nan­cial bailout.

A sec­tion of me­dia on Wed­nes­day car­ried a re­port con­tend­ing that the coun­try would be forced to re-enter into IMF pro­gramme, he said. The re­port had por­trayed a neg­a­tive picture of the econ­omy and com­pletely ig­nored pos­i­tive de­vel­op­ments, he added.

The spokesman of the Fi­nance Divi­sion gave fol­low­ing com­ments in re­sponse to the re­port:

The fact that Pak­istan’s eco­nomic indi­ca­tors are pos­i­tive has been ac­knowl­edged in­ter­na­tion­ally. Re­cently, the Asian De­vel­op­ment Bank (ADB) stated that Pak­istan en­joyed growth de­spite trade con­trac­tion.

The ex­ter­nal sec­tor which was un­der strain in the last two years due to fall­ing ex­ports and de­clin­ing remit­tances has now started show­ing pos­i­tive and im­pres­sive growth both in ex­ports and remit­tances.

In Au­gust 2017, ex­ports have wit­nessed a growth of 12.89 per­cent over the same pe­riod of 2016, while over pre­vi­ous month the ex­ports are higher by 14.41 per­cent and im­ports are only 2.42 per­cent and dur­ing July-Au­gust, FY 2018 ex­ports have reg­is­tered a growth of 11.80 per­cent.

Sim­i­larly, work­ers’ remit­tances have shown a growth of 13.18% dur­ing July-Au­gust, FY 2018 and on month on month ba­sis higher by 26.8 per­cent in Au­gust 2017.

Th­ese all bode well that pres­sure on cur­rent ac­count will ease, go­ing for­ward. The growth in FDI is also on up­ward tra­jec­tory. Dur­ing July 2017, FDI posted a stel­lar growth of 162.8 per­cent.

With re­gard to tax­a­tion, it is to be noted that the share of di­rect taxes in to­tal taxes has in­creased over the years.

In 1990-91 the di­rect taxes were just around 20% of to­tal taxes, rose to 31.1 per­cent in 2004-05, 38.2 per­cent in 2012-13 and 39.1 per­cent in 2015-16.

In FY 2016-17 the share of di­rect taxes reached 40% and it has be­come the sin­gle largest tax col­lected by FBR.

The gov­ern­ment is fo­cused on fur­ther in­creas­ing the share of di­rect taxes through var­i­ous pol­icy and ad­min­is­tra­tive re­forms in­clud­ing broad­en­ing of tax base.

Sub­stan­tial progress has been made to bring po­ten­tial tax­pay­ers in the tax net dur­ing the last four years. As a re­sult of th­ese ef­forts the num­ber of in­come tax re­turn fil­ers which was around 766,000 for the tax year 2012 has risen to 1.26 mil­lion in the tax year 2016 and would fur­ther in­crease in com­ing years.

The re­forms pro­gram has started pay­ing div­i­dends in shape of higher tax rev­enues, an ef­fi­cient, mod­ern, trans­par­ent and tax­pay­ers’ friendly rev­enue or­ga­ni­za­tion.

The rev­enue col­lec­tion has wit­nessed a sub­stan­tial in­crease dur­ing last four years. The net col­lec­tion in­creased from Rs 1,946 bil­lion in 2012-13 to Rs 3,362 bil­lion in FY2016-17, reg­is­ter­ing an over­all growth of around 73%.

In ab­so­lute terms rev­enue col­lec­tion has been in­creased by Rs 1.4 tril­lion. The tax-GDP ra­tio of the coun­try has reached 12.5 per­cent in FY 2016-17.

With re­gard to debt, the claim that PML(N) gov­ern­ment bor­rowed record Rs 10.8 tril­lion is in­cor­rect and based on in­cor­rect pro­jec­tions. The ac­tual in­crease in present Gov­ern­ment’s 4 year ten­ure is around Rs 6.1 tril­lion.

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