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Measures Taken To Avoid New IMF Program: Miftah

Karachi (May 01, 2018): Finance Minister Miftah Ismail on Monday stressed the need for curtailing budget deficit and increasing exports in order to avoid going for another IMF loan.

Addressing the post-budget seminar organised by the Institute of Chartered Accountants of Pakistan (ICAP), he said that such measures had been taken in the budget 2018-19 to avoid going into any new IMF program.

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Ismail said that the present government has given its best in the budget for the next government following the general elections. “Now it is the duty of the new government to maintain economic growth,” he said, adding that the budget was as per policy of PML-N.

Ismail said that as a finance minister it was his duty to ensure economic growth besides narrowing budget deficit. He said that growth target for next fiscal year has been set at 6.2 percent.

As per government commitments the tax rates have been reduced, he said, adding that five percent of tax has been proposed under the tax amnesty scheme for whitening the black money.The minister said that the government was making efforts to broaden the tax net. He said that a non-filer cannot purchase immovable property valuing above Rs4 million.

Ismail hoped that the Federal Board of Revenue (FBR) will collect around Rs4,000 billion during the outgoing fiscal year. “The FBR has been assigned collection target at Rs4,565 billion, a 11 percent higher than the present collection target,” he added.He said that where customs duties had been reduced on many items the government also levied or enhanced the duties on several other items.

The minister said that the salaried individuals are paying huge sums as income tax. “Therefore, the salaried individuals have been allowed tax relief in the budget.”

He stressed the need for curtailing budget deficit, adding that the federal government had reduced its expenditures but there was no relief from the provincial governments.

Ismail said that the government was taking measures to increase the exports and discourage unnecessary imports. He said if remittances and exports increase by 20 percent than the higher imports will not be a problem.

He further stated that the GDP growth should be brought at 10 percent for poverty reduction and employment generation.Commenting on rupee depreciation, he said that lowering dollar value would support import of expensive cars and luxury items and admitted that maintaining exchange rate in the past was a mistake.

Commenting on the outgoing fiscal year performance, the minister said that agriculture growth posted 3.8 percent, which was 10-year high. He said that flour prices in Pakistan were higher than other regional countries but wheat support prices were at the lowest.

He lamented reduction in cotton output saying that in the past Pakistan and India were producing equal quantity of cotton bales. But Pakistan is still at around 12 million bales and India is producing 26 million bales, he added.

Ismail said that the revenue collection had been increased by 100 percent during past five years. He said that very few people in Pakistan were paying taxes.

He further said that the government was not allowing any relief to tax evaders, however, there is need to bring those evaders into tax system.

The minister assured chartered accountants of rectifying the mistakes pointed out in the Finance Bill 2018 and Federal Budget 2018-19. He said that flaws in the budget documents would be addressed in the next two weeks.

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