ISLAMABAD, Jan 24 (APP):Finance Minister, Asad Umar said Thursday that the Economic Reforms Package was the beginning of implementing the comprehensive strategy to put the country’s economy on sustainable growth path by promoting domestic supplies.
The country could not sustain economic growth in past due to external deficit, because as soon as domestic consumption increases, the current account deficit jumps high, so the reform package had focus on increasing domestic supply and let economy stand on its own feet, he said while briefing the anchors of various electronic channels and media persons on the economic reforms package.
The minister said that the government was facing serious economic challenge when it assumed the power, however, it initiated phase-wise strategy to overcome these challenges.
Initially the government was faced with challenges of economic survival due to rising current account deficit (CAD), so it had to take difficult decisions, which although did not directly benefited people, but were necessary for survival, otherwise the country would have faced losses.
However, the survival was not sufficient and only purpose; the objective was to lead the country towards economic progress and development, so the second phase of government initiatives was aimed at developing a comprehensive framework with the consultations of economic experts on how to lead economy towards sustainable development on long-term basis.
He said that third was the implementation stage, and the reforms package was the beginning of this process. “This is just beginning, the beginning of economic revival,” he added.
Pointing out towards unsustainable economic growth, the minister said that the country could not sustain growth in past due to dependence on imports, so the focus of economic reforms package was to encourage domestic supplies.
ISLAMABAD, Jan 24 (APP):Finance Minister, Asad Umar, who was accompanied by Adviser to PM for Commerce, Textile and Industry Production Razzak Dawood, Minister of State for Revenue, Muhammad Hammad Azhar, said that the reforms package was aimed at promoting domestic supply to reduce dependence on imports.
He said that though there was shortfall in revenue collections during the first five months of the current fiscal year owing to reduction in price of petroleum prices and reduction in cell-phone card tax, however, expressed the hope that this would be overcome by the measure of lifting ban on non-filers for purchasing cars upto 1300cc.
Similarly, Asad Umar said that if the amendment in Gas Infrastructure Development Cess (GIDC) bill is approved and implemented, it would also help boost revenue collection.
However, the minister said that government was more focused on bringing about structural reforms in Federal Board of Revenue (FBR) instead of only focusing on enhancing tax collections. If we go after only revenue collections, it may be beneficial on short term basis, but structural reforms would have long term benefits, he added.
Meanwhile, Muhammad Hammad Azhar informed the media persons that there were three data banks currently being used by the FBR were not integrated with each other, so efforts are on to improve the FBR system. He said that there was need of introducing technological solutions.
The Finance Minister said that the tax return filing has increased by almost 34 percent from 1.1 million to 1.45 million. He said that the government was focusing on utilizing modern technology for tax collections instead of stifling the taxpayers.
To a question whether the government plans to go to International Monetary Fund (IMF), the minister said that the government would do only what is good for the economy of the country.
Good or difficult, the government would take decisions that benefit economy, he said adding that it would not hide behind the IMF. He said that the government was engaged in usual negotiations with IMF.
The minister said that the government would initiate a scheme for small traders, initially in Islamabad to facilitate them to pay fixed taxes.
He said that two to three categories would be developed in the capital city on the basis of income, to fix taxes. He said that if successful, this would be replicated in entire country.
He was of the view that there was need to incentivize the private sector to create job opportunities and promote economic growth.
To a question, the minister said that the own money given on the purchase of new vehicles was totally unacceptable.
To another question, he said that the fiscal deficit has been targeted at 5.6 percent whereas revenue collections at Rs 4395 billion.
The Finance Minister said that the government would soon release five –year framework aimed at reducing debt to GDP ratio and dependence on external debt.
He said that the debt to GDP ratio had jumped to 72 during the tenure of last government.
He said that tax on profit of investment instead of actual investment would help promote businesses.
With respect to Pakistan Steel Mills (PSM), he said that different options were under consideration. He said that the production capacity of PSM will go to 3 million tons and reduce dependence on imports and it would use local iron and coal which would reduce import bill. He said that governance was the main issue of PSEs, which would be addressed.
Meanwhile, Razzad Dawood said that a committee constituted for rehabilitation of Pakistan steel mills would give its report in March.