ISLAMABAD: Minister of State for Finance Aisha Ghaus Pasha has informed the Finance Standing Committee of the National Assembly that the government has not violated the International Monetary Fund (IMF) agreement by not increasing petroleum levy on October 1, 2022.
After some committee members wanted to know whether Pakistan has violated the IMF program by adjusting petroleum levy between petrol and HSD, Minister of State for Finance Aisha Ghaus Pasha acknowledged that the government did not increase petroleum levy on 1st October 2022 because additional petroleum levy was collected during Miftah Ismail’s period.
However, later after secretary finance said something to her she clarified that petroleum levy was not additionally collected instead it was increased on petrol and reduced on diesel. She said that Pakistan has not violated the IMF agreement by not increasing petroleum levy.
The minister added that the government is committed to the IMF program because it is important for external financing inflows from multilaterals that the country is in need of.
Earlier, during agenda items on measures announced during the Covid-19, treasury member has appreciated the role of State Bank of Pakistan (SBP) and Federal Board of Revenue (FBR) in handling of Covid in fiscal year 2019 and 2020 and stated that measures taken by them considerably lessen the impact of pandemic on the life of common man.
The chairman of the committee stated schemes announced during the Covid benefited less to the small business and were meant for big businesses such as textile and others. He regretted that that share of the SMEs in the total credit disbursement was merely seven percent and remaining 93 percent was taken by influential businesses. Sheikh also referred to India and stated that SMEs share in total credit disbursement in India was 14 percent and in Bangladesh was 12 percent.
Upon this, Ali Pervez of the ruling party said that the SBP’s and the FBR’s role in handling of Covid was much better compared to other countries and do not deserve criticism. He said that as access to credit to the SMEs falls in financial inclusion, therefore, it should be taken as separate agenda.
He said that the credit being provided to the textile sector was being criticized, whereas, textile sector contributes to 67 percent in the total exports of the country. That is why it gets more credit, he added.
The FBR chairman informed the committee that tax refunds worth Rs338 billion were given during Covid period of 2019-2020 and some portion of 2021 even though the tax collection was stagnant. He said that the Finance Ministry has provided Rs110 billion grant to the FBR for clearance of refunds.
The State Bank of Pakistan (SBP) governor said that SMEs and agriculture sectors are priority of the government because these are main pillars of the economy. He added that during Covid Rs436 billion loans were given to various sectors under Temporary Economic Refinance Facility (TERF) to ensure that people are not laid off and economic activities continue. These loans were issued to hundreds of companies, he added, besides Rs100 billion loans were given for low-cost housing scheme during corona. Export sector was also extended financing and SMEs were also given loans. He said that the scheme initiated for the SMEs would be further improved and would be continued. The meeting was informed that turnover tax rate for SMEs was also reduced.
Copyright Business Recorder, 2022