Monday Jan 10, 2022
ISLAMABAD: Federal Minister for Finance Shaukat Tarin assured on Monday that after the passage of the State Bank of Pakistan (SBP) Amendment Bill 2021, the central bank will still remain under the government's control.
The finance minister's comments came during a meeting of the Senate Standing Committee on Finance Revenue and Economic Affairs, with Senator Faiz Ullah in the chair.
The finance minister said the government will nominate the names for the SBP's board of directors. "The government will also have the authority to appoint the members of the board [...] State Bank of Pakistan will not be independent."
The National Assembly's Monday session will take kick off at 4pm, but the SBP bill is not under consideration as per the 48-point agenda issued by the National Assembly Secretariat.
Tarin is set to seek approval of the House for the controversial Finance (Supplementary) Bill, generally known as the "mini-budget", with the Opposition set to meet before the session to block his move.
Meanwhile, speaking during the session, Tarin said if Senate is not considered part of Parliament, then why not shut it down.
"I am an elected Senator, you insulted me in a light tone," the finance minister said as he spoke to the committee's chairman, Senator Mahmood.
The finance minister told the committee that there would be a slight increase in inflation after the passage of the so-called mini-budget, as he talked about the bills which are a pre-requisite to resume the $6 billion External Fund Facility (EFF) of the International Monetary Fund (IMF).
"Why shouldn't I impose taxes on cosmetics and drinks [...] agricultural products should also be taxed," the finance minister, adding that the government expects Rs100 billion in income from income taxes.
Tarin said the government has delayed the talks with IMF and has given them a later date of January 28 or 31, which was originally scheduled to take place on Jan 12.
"We told the IMF that the Parliament is not a rubber stamp. The bills that the parliament will approve will be presented before the IMF," the finance minister said.
Following a request from the Pakistani authorities, the Executive Board of the IMF has deferred consideration of the completion of the sixth review and release of a $1 billion tranche under the EFF, The News reported.
The meeting was meant to take place this week on January 12 to review the recommendation to release the funds. However, Pakistan has been so far been unable to pass recommended fiscal tightening measures tied to the funds' release.
The finance minister said the international money lender wanted to improve Pakistan's taxation system, as he highlighted that tax reforms should have been done in 2010. "We had to impose value-added tax in 2010."
Tarin said the retail sector's sales stand at Rs20 trillion and Rs16 trillion taxes are out of the tax net, so the IMF has asked us to "tax everyone".
Hitting out at the previous government, Tarin said the dollar had been artificially fixed at Rs60.
PML-N Secretary-General Ahsan Iqbal interrupted and said that Tarin could not speak in such a manner with the chairperson of the committee. "You cannot berate the chair."
At this, the chair said he would ask the members to leave if they were shouting or misbehaving with him.
For his part, Governor SBP Reza Baqir said a wrong perception was being built that the government had sold the state bank to the IMF. "Now the document is available to everyone, the government's powers have not been curtailed."
Baqir asked the committee whether it was wrong to be a former employee of the IMF. "Several SBP governors have been employees of the IMF and other financial institutions."
"I have no other nationality, I am a Pakistan."
Later, Iqbal said these were important amendments, and therefore, the finance minister and the SBP governor should speak to the Opposition on the matter.
Meanwhile, the committee's chairman said PTI was not the first government to seek help from IMF. He told the committee that the bill could be amended on Parliament's recommendations.