ISLAMABAD: Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Sheikh has said Pakistan is fast heading towards economic stability as the government is expected to collect up to Rs1 trillion in non-tax revenue by December next year.
“Of the total amount, Rs200 billion will come from renewal of cellular companies’ licences, Rs300 billion from Liquefied Natural Gas (LNG) terminal’s privatisation, which is expected to be finalised by December and Rs300 billion as interest from the State Bank of Pakistan,” said the finance adviser while addressing a press conference on Sunday.
Sheikh was accompanied by Federal Board of Revenue Chairman Shabbar Zaidi and Finance Secretary Naveed Kamran Baloch.
“Economic stability is being achieved due to timely and prudent measures taken by the Pakistan Tehreek-e-Insaf (PTI) government,” said Sheikh, adding that there had been considerable growth in exports along with sizable reduction of 73% in the current account deficit.
The stock market, he said, had also been stable for the last couple of weeks.
He said at the same time, the overall revenue collection had also increased to Rs580 billion during the first two months of the current year from Rs509 billion in the corresponding period of last year, showing a 14 per cent growth.
Due to decline in imports, revenue in that regard had decreased, but domestic revenue collection surged by 40% during the period, he said, adding that during the first two months of current financial year, the fiscal deficit remained controlled as evident from the fact that it was recorded at Rs24 billion during the period.
The adviser said, “The inflation rate is lower than expected and it will hopefully come down further in the next few months as the government has taken several measures, including no borrowing from the SBP, to control it. We have not borrowed even a single rupee from the SBP during first the two months (July-August) of the current fiscal year.”
Sheikh said the government had also fulfilled its pledge of clearing all verified sales tax refund claims of around Rs22 billion filed till 2015, which benefited some 10,000 people, adding that the business community had lauded that initiative.
“The income tax refunds of up to Rs100,000 pending since 2015 have also been cleared,” he said. “The government has introduced a new system with no human intervention to ensure immediate refunds to the exporters. Under the system, which is being labelled as ‘Faster’ and is operational since August 23, refund claims of the previous month will be cleared by the 16th of the next month.”
On power sector reforms, he said the circular debt, which had been reduced to just Rs10 billion from Rs38 billion per month, would be zero by December next year.
“By overcoming power theft and other losses, the government saved around Rs120 billion,” he added.
On the stability phase, the adviser said after assuming charge, the PTI government focused on the external sector and reached an agreement with the International Monetary Fund which had been widely appreciated, adding that it also engaged the World Bank and the Asian Development Bank.
He said the private sector, vulnerable segments of society and ignored regions of the country were given special attention in the budget.
Moreover, the government also took austerity measures and reduced its expenditures by Rs50 billion, besides freezing expenditures of military and payment of high officials, he added.
On the privatisation process, Sheikh said, “The government has decided to hand over such public organisations to the private sector which could not be handled by the government departments. Some 20 state owned enterprises (SOEs) have been put on the priority list for privatisation. When I was privatisation minister back in 2006, the then government had privatised 34 SOEs.”
The adviser said the government was also mulling over privatising the profitable entities, including National Bank of Pakistan and State Life Insurance Corporation.
He said the government was confident to surpass the growth target of 2.4% set for the current fiscal year (2019-20) as after gaining stability on the external front during the past year, the economy was now moving forward on the right path.
He said the government was specially focusing on the development of agriculture sector. “Over 3% growth is expected to be recorded by the end of the current fiscal year in the sector, which remained totally neglected during the past regimes as is evident from a negative growth of 0.8 per cent during 2013-18,” he added.
Sheikh said the government was working hard for public welfare and urged the people to remain calm during the difficult time as the government had to take long term difficult decisions for their betterment.
To a question, the adviser said the visit of the IMF team to Pakistan was a routine matter. It had already been agreed between the two sides that the IMF team would visit Islamabad quarterly to review the economic performance.
To a question, FBR Chairman Shabbar Zaidi said the number of tax filers had increased by 600,000 to 2.5 million this year from 1.9 million last year.
“An amount of Rs6 billion has been received from the new tax filers,” said Zaidi, adding that the FBR had launched a mobile application through which the taxpayers would be able to easily file their income tax returns and pay their taxes.
(With additional input from APP)