ISLAMABAD – While announcing details of financial assistance of $4.2 billion from Saudi Arabia, Advisor to Prime Minister on Finance and Revenue Shaukat Tarin on Wednesday said that talks with International Monetary Fund (IMF) would be successfully completed in next couple of days.
He also hinted for imposing more taxes to meet the annual tax collection target after completion of talks with the IMF.
In a major development, Saudi Arabia has announced a financial assistance $4.2 billion for Pakistan. The Adviser to PM said that Saudi Arabia would keep $3 billion in State Bank of Pakistan’s account and would provide deferred payment facility of $1.2 billion for petroleum products during the year. The Saudi financial assistance would help in addressing the balance of payment issues, Shaukat Tarin said in a press conference along with Minister for Energy, Hammad Azhar here.
He further said that Saudi Arabia would provide the facility on the previous condition and it has no link with the IMF.
He said that during the recent talks in Saudi Arabia, Crown Prince Mohammad Bin Salman expressed his happiness to extend the support to Pakistan. He said the Saudi Crown Prince said Pakistan and Prime Imran Khan hold a special place for the Kingdom.
Talking about the IMF’s programme, the Adviser said that Pakistan would soon finalize agreement with the IMF. “Talks are in final phase, which will be concluded in a day or two”. He informed that all issues with the IMF have been resolved except one, which he has not shared with the media. He clarified that there was no uncertainty over talks with the IMF. He added that he had almost concluded the agreement with the Fund before leaving Washington last week.
He said an agreement with the IMF would augur well for the markets in Pakistan. The IMF mostly talks on maintaining primary deficit. The government had projected to generate Rs600 billion from petroleum levy in current fiscal year. However, it has not generated any amount from this head as it reduced the petroleum levy in order to provide relief to the masses. Therefore, the IMF asked how would we bridge the gap. We told them that the tax revenue for the first quarter was Rs175 billion above the target,” Tarin said. The government has assured the Fund that it would achieve the tax collection target as FBR had already surpassed the target by Rs175 billion in first quarter of the current fiscal year.
The Advisor hinted for imposing more taxes kn the directions of the IMF. He said that the government would rationalize the taxes. However, he did not share the further details.
Federal Minister for Energy Hammad Azhar said that our oil prices are lower in the world except the ones producing oil. He said that the inflation is a global phenomenon as the whole world is passing through commodity cycle. However, he expressed the hope that the world commodity cycle would break within six months and the prices in world market would come down leaving positive impact on inflation in Pakistan.
He further said that global prices of food items and oil had tripled while oil prices in Pakistan were still lower than the world and the price of gas in Pakistan had not increased since 2019. He said a bag of urea is selling at Rs1,800 in Pakistan as compared to its price of Rs7000 per bag in international market. He informed that the government has given a tax exemption of Rs450 billion on oil since August 2020. However, he said this has put the government under pressure for extending too much relief, he added.
Speaking about the Financial Action Task Force (FATF) and its decision about Pakistan, the federal minister said Pakistan had met 26 out of 27 targets set by the FATF. In June, Pakistan received 7 more action items on money laundering and the country delivered on four of them immediately, the minister added.
https://nation.com.pk/28-Oct-2021/tarin-hints-at-more-taxes-to-meet-imf-targets
