Minister for Finance and Revenue Senator Ishaq Dar sb presented “mini-budget” in the National Assembly and Senate as the government sought to fulfil the prerequisites for unlocking the $1.1 billion International Monetary Fund (IMF) loan tranche.
Running against time to pacify the IMF for the revival of the bailout programme, the government last night approved hiking the general sales tax (GST) rate from 17 to 18% and increasing the Federal Excise Duty (FED) on cigarettes in order to fetch an additional Rs115 billion out of Rs170 billion agreed to by Pakistan in line with the IMF conditions.
Through the “mini-budget”, the Pakistan Democratic Movement (PDM)-led government aims to reduce the budget deficit and broaden its tax collection net — in order to meet the conditions laid forth by the Washington-based lender.
The National Assembly will not be sending the bill for further deliberations to the Standing Committee on Finance and Revenue, while the Senate has referred the legislation to the relevant committee.
Pakistan and the IMF could not reach a deal last week and a visiting IMF delegation departed Islamabad after 10 days of talks, but said negotiations would continue.
The $350 billion economy is in dire need of funds as it battles a wrenching economic crisis.
In a bid to appease the IMF, the government sought to roll out the fiscal measure through an ordinance, but President Dr Arif Alvi advised the administration to seek the parliament’s consent instead.
In his address to the lower house, FinMin Dar said that the nation is facing unprecedented crises due to the Pakistan Tehreek-e-Insaf (PTI) government’s “substandard” policies.
The country, during the Pakistan Muslim League-Nawaz’s (PML-N) previous government, had witnessed economic development and the gross domestic product (GDP) had increased by $112 billion.
“The PML-N always tries to take fewer loans. Foreign investment had also increased during PML-N’s tenure. In contrast, during the PTI’s government, the loans hit record highs, and a common man’s income also plunged.”
The finance czar said that apart from overcoming the challenges that the present government faces due to PTI’s policies, last year’s floods had also incurred losses worth more than $8 billion.
“But, we should always prefer the state over politics,” he reiterated — the mantra that PDM leaders have time and again propagate as they face an uphill task on the economic front.
