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ISLAMABAD: Finance Minister Miftah Ismail Friday said a staff-level agreement with the International Monetary Fund (IMF) would be reached in a few days as both sides have sought some clarifications on some points during the first round of talks after receiving the MEFP from the Fund.

In response to questions during a press conference along with Federal Board of Revenue (FBR) Chairman Asim Ahmed, the finance minister said that the Memorandum of Economic and Financial Policies (MEFP) to be the basis for the staff-level agreement was received from the IMF some three days ago and its portions have also been sent to the relevant ministries for their responses.

He further explained that the portion related to the power sector was sent to the Power Division and the petroleum related to the petroleum sector, and likewise, to the others.

The minister said that all of them are preparing their responses that would be correlated and then sent to the fund.

He said that discussions with the Fund are being held and hopefully in a couple of days, things would move in a positive manner toward a staff-level agreement as all the difficult decisions including the Thursday night further increase in the petroleum prices have been taken, and there remains no hitch as per his understanding.

The minister said that the major factor in inflation number was petrol and diesel prices’ increase and for the first time Rs10 on petrol and Rs5 on diesel against Rs30 PL and Rs45 sales tax have been committed to the IMF by the previous government.

Earlier, during a press conference, the minister said that a record tax of Rs763 billion was collected by the FBR which led to surpass the Rs6,100 billion target for the just concluded fiscal year.

He said that income tax collection of Rs382 billion was 45 percent higher over Rs262 billion for a year before. He said that not a single rupee in advance tax was taken to meet the revenue target.

Miftah hopeful of IMF programme revival in 1-2 days

He said that all the processed claims of refunds have also been cleared including exporters DLTL of former prime ministers, Nawaz Sharif, Shahid Khaqan Abbasi, and Imran Khan tenures. He said that Rs30 billion refunds claims and Rs42 billion DLTL have been paid and there was no processed claim pending.

The minister said that Rs100 billion have been injected in business which would help increase exports in this fiscal year. He said that he even told the IMF that the FBR tax collection would be Rs6,050 billion, Rs50 billion less compared to the set target and despite, record rebate payments, the FBR tax collection was over Rs6,100 billion.

The FBR chairman said that that was possible due to collective efforts because last quarter was very challenging because growth in revenue started gradually after March 2022 consequent to Rs40-45 billion deficit in sale tax domestic on a monthly basis.

So there was a challenge, how to reach revised target of Rs6,100 billion. He said that a strategy was made in the FBR of enforcement and administrative measures mainly focusing on recovery and arrears and Rs250 billion was received through enforcement alone.

So this a historic measure of collecting such a big amount through enforcement. He said that under enforcing the FBR managed to get returns filed of 320,000 filers who were registered but were not filing returns, this includes income tax and sale tax.

Last year, advance tax monitoring system was established and there is 58 percent increase in advance tax labiality Rs565 billion as opposed to Rs360 billion a year before because compliance was improved significantly.

He said for the next fiscal technology-based track and trace system is a priority area for the next fiscal year and it is being implemented on 12 cigarettes companies from July 1, 2022, and fertilizer and cement would also be implemented from July 2022, and in POS initiative around 11,000-12,000 new retailers would be added.

Broadening of the tax base would be done through technology as well as through a fixed tax.

Copyright Business Recorder, 2022


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