Finance Minister Miftah Ismail has said that the government will prioritise the agriculture sector, exports and growth in the upcoming federal budget 2022-23, set to be announced on June 10.
Talking about the government’s decision to hike petroleum product rates, the finance minister, in an interview with a private channel, said that despite the tough decision, the government is still bearing losses on petrol and diesel.
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Pakistan is facing an unfavourable economic situation as it remains engaged in talks with the International Monetary Fund (IMF) over revival of a stalled Extended Fund Facility. The Fund has emphasised the urgency of concrete policy actions, including removing fuel and energy subsidies, to achieve programme objectives.
To show its commitment to reviving the programme, the government has partially removed the fuel subsidy, and hiked the prices of petroleum products as well as the power tariff.
“The incumbent government's first priority was to save Pakistan from default, which we have done after taking difficult decisions,” said Miftah, adding that things would have been much worse if conditions of the IMF were not met.
The minister said that Pakistan has to pay $21 billion in foreign debt payments by next year, while the current account deficit stands at $10-12 billion.
“We need $33 billion by next year, whereas we have only $10 billion in reserves,” he said.
Miftah informed that the government is negotiating with the Fund to increase the size of the programme by an addition of $2 billion to $8 billion. He said that the government would remove the Rs5 per unit subsidy in electricity rates announced by the PTI government in the near future.
The minister also said that he expects the inflows to the tune of $2.4 billion from China in the coming days, whereas, expressing optimism of a loan re-rollover from Saudi Arabia. “Similarly, the government is in talks with Qatar and UAE as well,” he said.
Miftah said the economy was stable in the previous tenure of Pakistan Muslim League-Nawaz but later deteriorated due to poor economic policies of the previous government.
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“Since Liaquat Ali Khan era, the total loan taken by all governments was $25 billion dollars, while the PTI government alone in just three and a half years took $20 billion loan."
Talking about oil purchase from Russia, Miftah said that the previous government had requested the purchase of oil at a discounted rate from the country, but no answer was received. He also said the current government has initiated talks with Russia for the purchase of wheat.
Miftah said there will be a nominal increase in the defence budget.
He also said: “We will also try to tilt away from the wealthy elite towards to low incoming masses... I will impose more taxes on the wealthy, but no taxes will be levied on the salaried class".
Earlier, the Federal Board of Revenue (FBR) shared details of the new taxation measures of Rs400-450 billion, including the proposed plan on the Personal Income Tax Reforms to be incorporated in the Finance Bill 2022, with the Prime Minister Shehbaz Sharif on Saturday.
Tax authorities discussed in detail the strategy including enforcement and administrative measures to meet the Rs7.2 trillion revenue collection target for 2022-23. However, the Prime Minister has directed the FBR to meet the commitment of the present government to provide a conducive and friendly environment to the businessmen, ease of doing business, employment generation, export promotion, and economic growth of the country.