ISLAMABAD: Pakistan Peoples Party Finance Secretary Senator Salim Mandviwalla Wednesday claimed that Pakistan Tehreek-e-Insaf (PTI) government failed to fulfill any of its promises, while it has imposed additional taxes of Rs750 billion on the poor people, whereas the GDP growth is zero. The Pakistan Muslim League (N) has already criticised government’s economic policies.
Addressing a news conference with Shazia Atta Marri, Faisal Karim Kundi and Haider Zaman Qureshi, he said that the PTI's leader Imran Khan has spoken about nothing but corruption over the last 1,000 days in power but his own government is engulfed in corruption scandals.
“Imran Khan failed to introduce reforms in any sector. The power crisis has escalated in the last three years and the water dispute between provinces is escalating. Agriculture was destroyed and a food exporting country was turned into a food importing country. Imran Khan had promised 50 lakh houses but not a single house was handed over to any person,” he said.
He said that GSP Plus status will not be available for Pakistan, which was made available by the PPP.
He said that the IMF did not press for an increase in interest rate but the governor State Bank of Pakistan increased it.
“The governor will be held accountable for 700 billion rupees. It is ironic that the government was not aware of governor SBP's actions,” he said.
The PPP leader said that every Pakistani is under debt of 7% (in $ terms), while the circular debt in Gas Sector is over Rs300 billion. He said that there is no progress on the CPEC.
He said that Power Sector circular debt is over Rs2,300 billion and refunds are at Rs700 billion.
He said that Corporate Income Tax on small and medium enterprises should be brought down to 20 percent.
About the poverty alleviation, the former finance minister said that 31.3 percent poverty was under PTI poverty increased up to 40 percent as of June 2020.
He said that unemployment increased up to 28 percent (6.65 million people are jobless), while 10 million jobs were lost under the PTI government.
About tax revenues 2019 and 2020, he said that additional Rs150 billion is imposed on people of Pakistan.
Impact of poor tax management has resulted in a fiscal deficit average of 8.6 percent in two years, he said.
In dollar terms, tax revenue growth is in negative terms, he said.
He said that debt-to-GDP ratio has gone up to 87.2 percent in 2020 and is proposed at 92.25 percent in 2021.
He said that export growth in first two years of the PTI government dropped by over $2.3 billion despite, devaluation of 40 percent.
The PPP senator said that Power Sector Debt doubled in two years, which was Rs1.1 trillion for financial year 2018 which increased up to Rs2.3 trillion in financial year 2020.
He claimed that weak economic management and overly anti-growth policies have resulted in growth of 5.8 percent falling to 2.1 percent and then to -0.38 percent in financial year 2020.
He said that the government is blaming every failure on the Covid-19.
He said that the Covid-19 vaccine was not available for months in the country.
“Tax collection was doubled during the PPP and has now reduced. In terms of dollars, the PPP had collected 36 billion dollars, whereas, the PTI government has collected only 26 billion dollars. The Benazir Income Support Program cannot be renamed because it was introduced by an act of the parliament. The PPP had doubled salaries and pensions,” he said.
He said that taxpayer data should be collected from all over the country through NADRA.
He said that there is no focus on the agriculture sector.
“Businesses were shut down during the Covid-19 pandemic in countries around the world but their employees were paid salaries by the government. People are paying seven percent tax on Roshan digital account. Chairman Bilawal Bhutto-Zardari has left the matter of passing the budget to the Leader of the Opposition. Steel Mills and the PIA are closed then how they will be downsized,” he asked.
The salaries of railways employees are provided by the Ministry of Finance and not from the railway account, he said.
Senator Salim Mandviwalla said that there is no transparency as regards the Corona Relief Fund.
He said that the Auditor General’s report has refused to share details of spending of foreign grant and aid/loan procured by the government of Pakistan for Covid-19.
He said that the Asian Development Bank has given $ 1.5 billion, the IMF relief fund $ 1.39 billion, and the World Bank has given $ 200 million to Pakistan for the corona relief.
He claimed that the IMF program’s conditionality included (i) interest rate hike and (ii) debt re-profiling were agreed.
He said that medium-term and short-term re-profiling of government loans, which increased the interest payments by the federal government by over Rs300 billion.
He said that hot money was around $2 billion and this was converted into rupees and interest rate of 13%+ was applied to it.
This added to the overall interest costs of the government and subsequently, all the hot money left Pakistan including the high interest that was paid on it, he said.
This is exactly what happened in Egypt, which totally shattered their economy and to date this is widely criticised, he claimed.
While giving the way forward, the PPP leader said that the tax net should be widened and all incomes must be treated at the same rates and exemptions to the rich must be withdrawn.
He said that the Nadra data shall be obtained for non-tax filers and ID shall not be renewed, if the person is supposed to be a taxpayer and is avoiding to be a taxpayer.
He said that in the service sector, the retail and the wholesale must be brought into the tax net and no new taxes should be imposed; however, the government has already imposed Rs140 billion of additional taxes via ordinance.
He said that the total new taxes under the PTI government in 2020-21reached Rs900 billion, which is two percent of the GDP.
It can be resolved by eliminating the indirect taxes and encouraging the direct taxes, he said.
About the agricultural sector, the PPP Secretary Finance, Senator Salim Mandviwalla, said that agriculture productivity requires that preferential GST on fertiliser of twp percent must not be changed.
He said that no plan for foreign and local investment in Pakistan, which is the key to achieve all economic goals.
He said that the tax on small and medium enterprises should be brought down to 20 percent.
He said that the high remittances that Pakistan is witnessing is a result of a policy initiated by the PPP government with its Finance Minister Shaukat Tarin called Pakistan Remittance Initiative, while securing and helping the oversees Pakistanis to securely send money to their parents and families.
Shazia Marri said that IRSA is not fulfilling its responsibility in the case of water distribution among the provinces.
The government should pay attention to the issue of water and solve it, she demanded.
She said that the government's performance is zero.
If the performance of the Sindh government is so bad then how is the PPP winning the by-elections, Marri asked.
Copyright Business Recorder, 2021
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