Advisor to Prime Minister on Finance Dr Abdul Hafeez Shaikh stated that the agreement with the International Monetary Fund (IMF) cannot be made public till the approval from its board which is expected within a couple of weeks.
Addressing a press conference along with Chairman Federal Board of Revenue (FBR) Shabbar Zaidi, Minister for Planning, Development and Reforms Khusro Bakhtyar, Minister of State for Revenue Hammad Azhar, and Minister for Power Umer Ayub the advisor said signing on the IMF programme will send a good signal worldwide that Pakistan is managing its economy in a disciplinary fashion.
The Advisor hinted at more taxes and stated that revenue collection would be increased to Rs 5,550 billion in the next fiscal year, around Rs 1,500 billion higher from projected tax collection of Rs 4,000 billion for this year.
Dr Hafeez Sheikh took only three questions - one from a stringer working for a foreign newspaper and two questions from the same local media group.
Responding to a question about cut in defence budget, the advisor said that Pakistan is living in a difficult region with security concerns at our borders and whatever sacrifices would be required would be made for 'our sovereignty and dignity'.
The advisor highlighted the broad contours of next fiscal year's budget: austerity, control of electricity losses and revenue increase adding if the people do not pay taxes, the country would be unable to fulfil external debt obligations. "We will give chairman FBR a revenue target of Rs 5,550 billion for the next fiscal year," he said adding that if the rich will not pay taxes, the country will not be able to meet its foreign obligations.
The advisor said that the government's data reflects that there are only 2 million tax payers in the country and 80 percent revenue collection in the total revenue is contributed by 360 companies and the remaining 20 percent is mobilised from 2 million taxpayers.
The advisor said that out of 341,000 industrial connections, only 40,000 are registered for sales tax and 300,000 are not paying taxes. "We will go after them," he said, and added that there are five million bank account holders in the country while only 400,000 bank account holders are tax payers.
The advisor said that inflation and unemployment are major challenges for the government and the government has taken measures to protect the weak segments of society. He said that exchange rate and oil prices are major sources of inflation and the government has no control over oil prices but it has decided to allocate Rs 216 billion for power subsidy in the budget for next fiscal year to consumers using below 300 units per month.
Although food inflation is on lower side, the government has increased discount rate to contain inflation, added Sheikh.
The advisor said that Ehsaas programme allocation is being almost doubled - from Rs 100 this year to Rs 180 billion for the next fiscal year. Additionally, allocation of Rs 50 billion will be set aside in the budget for underdeveloped areas as well as Rs 46 billion for erstwhile FATA and Rs 30 billion will be allocated for food subsidy.
He also stated that employment generation is another challenge and the government's priority would be to complete the stabilisation programme as early as possible to move on to higher growth trajectory to increase employment opportunities.
He said that in 2008-2013 growth was around 2.8 percent but there were 6.9 million jobs while in 2013-18 per capita income was higher but job opportunities have decreased to 5.7 million.
Housing projects will also increase employment opportunities and for Kamyab Jawan Programme, Rs 100 billion has been allocated to help the youth set up their own business, said the advisor and added that Rs 250 billion has been earmarked for agriculture uplift to help the people associated with rural economy.
The government would also provide a tax break for the private sector in the budget that in turn would provide employment opportunities. Sheikh said that another way to create employment opportunities would be through increase in allocation for PSDP and the government has earmarked Rs 925 billion for next fiscal year's PSDP.
The advisor said that pubic private sector will also be strengthened for project implementation.
Federal Minister for Power Omar Ayub Khan said that the Pakistan Muslim League-Nawaz (PML-N) government provided electricity to even non-bill payers and halted price rise for petroleum and products with a view to winning the 2018 elections.
"Former government laid landmines for us in power, planning and economy sectors which we are gradually removing," he added.
Omar Ayub stated that credit did not go to PML(N) government for ending power load-shedding in the country it left behind a circular debt of Rs450 billion. He said, 80 per cent feeders are load shedding free.
The minister expressed confidence that circular debt will be completely eliminated by December 2020 and added that an amount of Rs 81 billion has been saved due to recovery drive and action against electricity thieves during the last eight months.
He said currently, there is zero load-shedding on 8,790 feeders during Sehr and Iftar and around 80 percent feeders have been completely cleared from power theft. He asserted that 80 percent areas are free from load-shedding now.
He said the PTI-led government took pragmatic steps for Nepra and recommended Rs.3.80 per unit tariff hike but the government increased it by only Rs.1.27 per unit. No power tariff was raised for consumers using up to 300 units, he added.
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