‘Pakistan’s economy faces challenges’ due to reforms’ reversal

Former finance secretary says fiscal deficit has increased to unmanageable level

Our Correspondent April 11, 2018
Former finance secretary says fiscal deficit has increased to unmanageable level. PHOTO: AFP

LAHORE: Pakistan’s economy is now on a sustained growth path but it faces challenges due to the reversal of reforms after the Panama Papers case, which has increased the fiscal deficit to an unmanageable level.

This was stated by former finance secretary Dr Waqar Masood Khan while speaking with media in Lahore.

He said the PML-N government moved the economy up gradually from an average growth of less than 3% during 2008-13 to 5.8% in the first nine months of the current fiscal year. He said the housing sector is buoyant, car sales are growing at above 28% and inflation has hovered at 3.2% in the first nine months of this fiscal year.

Khan said prudent government policies have been complemented by a favourable global commodity situation.

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“The agriculture sector posted a growth of 3.5% that has kept food prices in check, followed by a healthy investment by both public and private sectors.”

However, he said that current account and fiscal deficits are a major challenge to the economy. “We have to maintain our foreign exchange reserves as we fulfil 90% of our energy needs through imports,” he added.

Regarding the tax amnesty scheme, Khan said that the huge concession given to the income of up to Rs1.2 million would wipe out 50% of the taxpayers. He said this concession would mean a tax concession of Rs150 billion.

Regarding the amnesty granted to overseas Pakistanis, he said that since the corrupt have been excluded from the scheme it would get a favourable response from the FATF. He said OECD countries are tightening their noose against ill-gotten money stashed by foreign nationals.

Published in The Express Tribune, April 11th, 2018.

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Hasain.Khan | 4 years ago | Reply Mr Ex Finance secretary is way off in his analysis. From where did he get the figure of loss of Rs 150 Billion due in increasing threshold of Individual tax slab to Rs 1.2 Million. The negative variance would be about Rs 65 Billion as in case of non-salaried persons section 113 (Minimum Tax) would kick in in most of the cases. One seriously wonders when he was Finance Secretary,how did he accept an extremly low number of tax filers of 1.0 Million and even out of this number about 30 % not paying atx and filing NIL returns
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