Friday Jun 25 2021

Tarin signals govt's readiness to discuss charter of economy with Opposition

Shaukat Tarin speaks during a session of the Parliament. Photo: File
Shaukat Tarin speaks during a session of the Parliament. Photo: File

  • Tarin briefs NA Standing Committee on Finance. 
  • Minister says only he and chairman FBR can have someone arrested for concealing income. 
  • IMF admitted Pakistan's alternate plan had "weightage", says Tarin. 

ISLAMABAD: Federal Finance Minister Shaukat Tarin on Thursday said the government is willing to speak to the Opposition on the charter of economy. 

The finance minister was briefing the NA Standing Committee on Finance at the Parliament House. He covered a lot of topics during the session, among which one of them was the powers of the FBR on arresting taxpayers for concealment of income. 

The minister said only he and the FBR chairman would have the authority to have arrested a taxpayer for willful concealment of income, adding that it would not rest with the Assistant Commissioner of Inland Revenue (IR) officer.

Tarin said the FBR has the data of 7.2 mn tax evaders, who would be sent notices through a third party rather than the FBR.

The IMF and the alternate plan

Speaking about the government's negotiations with the International Monetary Fund (IMF), the minister revealed that the government had held discussions with the money lender's higher-ups in a recent meeting. 

He said Pakistani officials presented an "alternate plan", which the IMF admitted had weight. 

"Now we will have to demonstrate that our alternate plan on revenue generation and curtailing circular debt is practical and is yielding positive results in the next few months," he said. "The IMF will club sixth and seventh reviews in September 2021."

Tarin said he was defying the IMF programme as the money lender was asking the government to forego all tax exemptions. He said if the IMF programme is not revived, the government would be taking a risk on Rs400bn. 

However, he said that the government decided to go to the international market to generate sufficient foreign funding through Eurobond, Sukuk bond, green bond and Panda bond in the next fiscal year.

In response to a question asked by the PML-N's Ali Pervez Malik, Tarin said that the IMF had asked Pakistan to impose an additional Rs 150 billion personal Income Tax (PIT).  He, however, said the government argued that instead of increasing the burden on taxpayers, the government can broaden the tax base.

On electricity tariff, he said that the IMF asked for raising tariff in June by 1.39 units and in totality by Rs 4.95 per unit so they were pressing Islamabad to jack up power tariff from Rs13 to Rs14 per unit to Rs18-19 per unit or 25% in one go. 

The IMF, he said, was providing us with a solution on account of capacity payments and collection to curtail increasing circular debt but their prescription would result in increasing power tariff.

In our alternative plan, the minister said that the government would fix structural defects through innovative formulas so instead of raising tariffs the government would check and prevent the increase in circular debt.

 “Over our alternate plans, the IMF emphasized upon continuation of talks to prove that our adopted strategy is practical and is yielding positive results on account of revenue generation and curtailing of circular debt,” Tarin added.

No change in FBR team, says Tarin

Answering a question by MNA Ramesh Kumar, Tarin said there would be no change in the FBR's team in the next fiscal year so that it can implement the budget and deliver on its targets. 

The minister said that the FBR has the data of 7.2mn tax evaders, who would be sent notices via third parties. Tarin had earlier warned that the government will take strict action against those who did not respond to the FBR's notices. 

He said that the government would provide clean lending to SMEs to the tune of Rs 100 billion as the government would provide subsidies to keep markup on the lower side and allocated Rs 12 billion for this purpose in the budget.