KARACHI: Finance Minister Ishaq Dar seems to have his work cut out these days. On the day he was indicted by an accountability court in Islamabad in a corruption reference filed against him by the National Accountability Bureau (NAB), a fellow party member also came down hard on his ethics and honesty, exposing cracks within the PML-N leadership.
Mohammad Zubair, the Sindh governor who also served as the Privatisation Commission chairman previously, said that the finance minister also managed to get away with “misguiding” then prime minister Nawaz Sharif on economic issues.
Zubair, who is also a key member of the economic team of the PML-N government, said Dar misled Nawaz Sharif, presenting to him a rosier picture of the economy back when the latter was still the prime minister.
“Dar told him [Nawaz Sharif] that everything is alright in the economy,” said Zubair while talking to the media on Wednesday. “I interrupted him [Dar] and said no, everything is not all right. Businessmen are facing hardships due to long pending tax refunds.”
The party level meeting was held around two to two-and-a-half months ago, he informed reporters.
His statement came as he addressed a delegation of business and economic journalists at the Governor House.
Talking about the issues of outstanding refunds, he said, “I criticised my government for [unnecessarily] holding back refunds. Simultaneously, I want businessmen to pay due taxes on time.”
The responsibility of clearing refunds belongs to the finance ministry rather than the Federal Board of Revenue (FBR), Zubair added.
Tax collection by the FBR has doubled to Rs3,500 billion in the last four years from Rs1,900 billion in fiscal year 2013. The increase has come on the back of increased tax rates and not necessarily through a widening of the tax net.
Meanwhile, Zubair encouraged businessmen to pay taxes, saying that many do not pay taxes reasoning that the government is not honest and will misuse the tax receipts. “This is not their [businessmen] prerogative to decide whether the government is honest or not. They must pay the taxes on time,” the governor stressed.
He assured that the issue of clearing refunds was on the agenda of Prime Minister Shahid Khaqan Abbasi, adding, “Abbasi has asked the concerned ministries to pay the refunds.”
Businessmen have estimated outstanding tax refunds to stand at around Rs200 billion. The refunds are to be paid to five export-oriented, zero-rated sectors of the economy, including textile, leather, carpets, surgical and sports goods, it was learnt.
Poor security and complicated energy crisis were the two key challenges to the economy when the federal government came into power in June 2013. Citing their achievements, the governor said, “We have tremendously overcome the two key challenges, which were a must to attract foreign investment.”
Talking about the multibillion dollar project, he said that the China-Pakistan Economic Corridor (CPEC) was not given to Pakistan as a gift; it was the PML-N government that won projects worth around $60 billion.
“We prepared detailed presentations on every sector of the economy and convinced China as to why they should invest in Pakistan.”
However, the current account deficit and balance of payments have remained two big challenges. “Jump in imports is due to the arrival of CPEC-related plant and machinery, which is not bad for the economy going forward. Decline in exports is a global phenomenon. Leading world economies like China and India have also faced a drop in exports,” Zubair commented.
He claimed that the government would overcome the power crisis by April 2018. Out of some 19 power projects earmarked by the government, five have started production. More would soon come online and help in mitigating the power crisis.
“There is zero power outage at industrial estates nationwide for the last one year or so,” he claimed.
Published in The Express Tribune, September 28th, 2017.