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KARACHI: Federal Minister for Finance and Revenue Miftah Ismail has said that the federal government had made tough decisions to help the country avert default by curbing imports to minimise the trade deficit and outflow of dollars.

“We are trying to curb imports through suspension of inward shipments of a few product categories,” he said during his visit to the Karachi Chamber of Commerce and Industry (KCCI) here on Saturday.

He said the current account deficit was also 17.5 billion dollars and the main reason for this is that Pakistan has now become a net importing country.

He said the situation improves for a couple of years and then problems arise again.

He said decisions have been taken to reduce imports to Pakistan.

He said the biggest problem is that Pakistan’s imports are eighty billion dollars while the country exported goods worth 30 billion dollars last financial year.

“I wish it was possible that Pakistan would have exports of eighty billion dollars and imports of thirty billion dollars,” he said, adding that if he had not gone to the IMF, everything would have been different.

Govt to limit imports for next 3 months: Miftah

He said Pakistan has to reduce the trade deficit in any case.

He further added that dollar was moving as per the demand and supply dynamics and the State Bank of Pakistan (SBP) had not intervened in the currency market. The rupee has seen an extremely volatile ride in recent weeks, closing at 239.94 on July 28 before appreciating nearly 7% in the next six sessions.

As authorities moved to curb imports, many have raised the question if suppressing inward shipments would also reduce tax collection.

“The Federal Board of Revenue (FBR) chairman is monitoring tax collections every day and he is concerned about the drop in customs duty collection as a result of contraction in imports; however, we are ready to face that,” he said.

“Import ban on CBUs of cars, mobiles and home appliances will remain in place till September 2022,” he said. Talking about the reversal of fixed tax regime, he admitted that before imposing the levy, he failed to take into account the small-scale shops such as Paan and cigarette kiosks.

“It was my mistake and if the government had not reversed the fix tax regime, small scale shops would have shut down,” the finance minister said. The federal minister said that he was never willing to go to International Monetary Fund (IMF) for loan but the circumstances compelled him to do so.

Miftah Ismail informed that five billion rupees have been spent on the post-flood situation in the country while floods in Balochistan have caused huge destruction.

He urged industrialists of Karachi to contribute to the Prime Minister’s Relief Fund. He urged the exporters to increase exports up to Rs 36 billion and after two or three months, inflation will also decrease.

“Stopping imports will further depreciate the dollar,” he concluded.

Copyright Business Recorder, 2022

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IMTIAZ CASSUM AGBOATWALA Aug 07, 2022 07:04pm
He is a headless chicken.
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Mr Wajjad Ali Aug 08, 2022 08:06am
I am an overseas Pakistani in the process of setting up a factory for the sole reason of exporting from Pakistan. There is no support for overseas Pakistanis who are willing to help the balance of payments situation to improve. No reply from TDAP to my emails. I also have an essential container of machinery and other industrial items stuck in Europe as Pakistan is restricting imports. How will the situation improve and when will it allow me to setup an export orientated business.
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Ahmad Kamal Aug 08, 2022 12:32pm
Country needs to manage energy production proactively. Costly generation of electricity through coal and Furnace oil should be avoided to reduce costly imports of fuel. Our businesses ask for concessions and not willing to close shops at sunset. Electricity supplies to shops costs Rs 60/ kWh (Peak hour generation on furnace oil and coal). IF shops are close at sunset costly generation of electricity can be avoided saving precious foreign exchange and reduction circular debt.
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Ahmad Kamal Aug 08, 2022 12:35pm
@Mr Wajjad Ali, Do not commit more than 25% of your assets in Pakistan. I have seen investors go bankrupt when investing in Pakistan where all sorts of barriers against investment are there.
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Danish Anwar Aug 08, 2022 02:11pm
@Mr Wajjad Ali, You have planned for your bankruptcy. You will face harassment every step of the way and will eventually lose your entire investment. I hope you haven't put more than 20-30 percent of your total wealth in this suicide mission.
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Amir Aug 09, 2022 08:47pm
@Mr Wajjad Ali, Welcome to Pakistan!
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