Coalition Support Fund: Govt books Rs170b in receipts from US

Dar says Pakistan, US negotiating new funding arrangement


Shahbaz Rana June 05, 2016
Federal Finance Minister Ishaq Dar. PHOTO: REUTERS

ISLAMABAD: Pakistan has booked $1.6 billion or Rs170 billion in receipts from the United States on account of reimbursements for the cost of the war on terrorism as it hopes that a new permanent arrangement will be finalised soon.

“Pakistan and the US are negotiating a new arrangement of Coalition Support Fund (CSF) but the details cannot be divulged at this stage,” said Finance Minister Ishaq Dar after addressing a post-budget news conference on Saturday.

In the proposed budget for the new fiscal year 2016-17, the government has estimated Rs959.5 billion in non-tax revenues including Rs170 billion from the CSF, according to the budget documents.

An official of the finance ministry said the US administration has already moved a bill seeking Congress’ approval for $900 million while another amount of $550 million is already in the pipeline.

The $1.6 billion projected receipts for new fiscal year are at the level of this year’s revised estimates.

The US Senate Armed Services Committee reportedly approved a proposal to set up a new fund to reimburse Pakistan for its efforts in the war against terror. The new fund also delinks the country from Afghanistan.



Dar claimed Pakistan had poorly negotiated with the US after 9/11. He said the then government should not have extended cooperation to Washington without a US commitment to pick up the losses due to the war on terrorism.

“Up to $118.3 billion in losses that Pakistan has so far sustained due to the war on terrorism in the last 15 years is simply staggering,” he said, adding that Operation Zarb-e-Azb is at its final stage, which has so far helped in bringing marked improvement in the security situation.

Dar also announced that the government would not give any “knee-jerk” reaction to Panama Papers and measures necessary to plug loopholes would be taken after thorough discussions.

The Panama Papers on April 3 revealed names of hundreds of powerful people, including children of Prime Minister Nawaz Sharif who have stashed away money in offshore companies.

Dar also hinted at an amnesty scheme for those who have stashed their wealth abroad but hastily added that it was just a proposal by “some people” and the government has not yet taken a decision on it.

He announced that the tax exemptions on perquisites of chief of army staff, chairman of joint chiefs of staff, president of Pakistan and judges of the Supreme Court would stay.

To a question, the minister said the government was not sustaining big losses due to tax exemptions given on benefits of VVIPs. He said the salaries of judges and the army’s top brass were not very high, therefore, they were granted tax exemptions on perquisites.

He said in case their tax benefits are drawn, the government will have to increase their salary packages.

Dar said that the government has given the best possible agriculture and textile packages given the tight fiscal space. “In budget 2016-17, the priority is the agriculture and textile sectors,” he said.

He hoped that the incentive packages would revive growth in these two critical areas, as negative growth in agriculture and exports led to missing the outgoing fiscal year’s growth target of 5.5%.

“The farmers have been given very big relief in the shape of lower prices for urea, DAP fertiliser and electricity,” he added.

Dar said the total cost of reduction in fertiliser prices was Rs46 billion. “The provinces can pick up the cost of waiving off sales tax on electricity bills to provide further relief to the farmers,” he added.

The minister said that Punjab Chief Minister Shahbaz Sharif had conveyed to him that his government would fully absorb the cost of sales tax on electricity bills and the other provinces can follow the suit.

To a question on underfunding the agriculture and industrial packages, he said the government always has room in the budget to adjust any additional impact. He appeared reluctant to disclose the exact head from where he would fund the agriculture package.

Dar vowed that his government has the will to enforce the tax measures that have been proposed for the new financial year. He recalled how the government successfully handled the pressure exerted by traders when the government imposed 0.6% withholding tax on all banking transactions.

“The financial impact of 10% ad hoc increase in salaries, merging two past allowances and upgrading the posts of lower-cadre staff is Rs57 billion,” he said, adding that the government has not showed any increase in allocation for paying salaries in the new fiscal year.

The salary bill allocation for new fiscal year is stagnant at Rs198 billion level of the outgoing fiscal year.

Published in The Express Tribune, June 5th, 2016.

COMMENTS (8)

Concerned | 7 years ago | Reply Then we complain about our sovereignty!
syed & syed | 7 years ago | Reply Stop living in fools paradise US will never give a penny.Ask Off Shore Company walas to sell their property and bring back to Pakistan else land in jail or prove that you earned this money while abroad.
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