ISLAMABAD: Prime Minister Special Assistant on Finance and Revenue, Dr. Waqar Masood has said that criticism on budget estimates and proposed revenue measures is unrealistic. Addressing a press conference, he said, if revenue target of Rs 4.700 trillion is achieved for the current period, which will probably exceed this figure, then for next fiscal year when GDP growth of 5 percent and 8.2 percent inflation are clubbed, nominal GDP growth will be 13 per cent which when multiplied with Rs 4.700 trillion, gives revenue of Rs 5.3 trillion.
He said the government has taken two types of measures in the federal budget. The nature of some of policy measures is that the government has not imposed any new tax but some exemptions have been done away with and in some cases incentives are withdrawn or tax rates adjusted. With these measures, Rs 242-250 billion revenue is expected to be collected, whereas additional revenue of Rs 250 billion is expected to be collected through enforcement measures.
"If some people say that new tax has been imposed, they are free to come up with their narrative," he continued.
Dr Waqar Masood said that the government is taking a key step, which is related to digital business, which implies that all these transactions are digital transactions. The government has started work on point of sales, 16-18 months ago, which has now showed substantial progress. Tier-1 retailers are 10,000 and 80,000 point of sales exist across the country. He added that an advisory board is being constituted under the chairmanship of Finance Minister which will be comprised of those people who are associated with retail business.
"In this case, no new tax has been imposed in the budget but measures have been taken to expand GST," he said. Dr Waqar Masood said that anti smuggling campaign by the government is being appreciated. Fencing on Pak-Afghan border is almost complete which has also reinforced the government's efforts to curb smuggling. Iranian smuggled oil which was available even in Attock, has been eliminated with concerted efforts. The government will further expand these efforts.
"We have fixed this target after a thorough thinking process," he maintained. Commenting on target of Rs 620 billion Petroleum Levy, Dr. Waqar Masood said that some people say that this target is unrealistic. He said petroleum prices were stable but are now skyrocketing at global level. He said, the government estimate of Petroleum Levy is based on real potential of this sector.
"Certainly, we will face problems but we are seeing good opportunities. For instance, in case sanctions are removed on Iran, positive changes will come in oil market. Likewise, an announcement has been made that Saudi Arabia will supply oil to Pakistan on deferred payment, which will be facilitating us. However, if the target of Petroleum Levy is not achieved we have dozens of other ways to meet revenue targets," he maintained.
In reply to a question, he said, he does not have complete information of Saudi Arabia’s deferred oil facility, but would share details once he gets them from concerned authorities.
The potential from privatisation has also not been estimated properly and only RLNG projects have been accounted for in the budget. Auction of 5-G licences and renewal of mobile companies licences is also due. He said some people are also criticizing allocations of Rs 900 billion in the PSDP 2021-22.
Talking about fiscal discipline, Dr. Waqar Masood said that when this government came into power primary deficit was 3.8 percent, which is expected to be 1 per cent at the end of current fiscal year. For next year, the government has set the target of 0.6 per cent and if one time expenditure on Covid and IPPs ate excluded, primary deficit will be +1 per cent. Commenting on provincial surplus of Rs 570 billion, he said, that the federal government has not estimated this on its own but after due consultation and proper thinking was this figure finalised. He said, provincial governments have been asked to spend this amount next fiscal year instead of in the current fiscal year. This year, federal government will provide additional resources of Rs 700 billion in FY 2021-22, he concluded.
Copyright Business Recorder, 2021