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Afzal hints at further borrowing, auction of bonds

By Mubarak Zeb Khan 2017-12-29
ISL AMABAD: Newly appointe d Minister of State for Finance Rana Mohammad Afzal said on Thursday the country has $6 billion of external liabilities to meet before the end of the current fiscal year.

In a wide-ranging conservation with journalists, Mr Afzal mentioned that the new economic team is working on many strategies to meet burgeoning expenses through possible borrowing, floating of bonds or reduction in expenditure and provincial surpluses.

Mr Afzal said the challenge for the new economic team is to preserve foreign exchange reserves and keep the budget deficit within the prescribed limit.

As for revenue, he said the government has devised a strategy to send notices to 10,000 ultra-rich people from January 2018. These are the people who are not paying taxes currently. `We have identified these people on the basis of available data,` he said.

He said potential taxpayers belong to the education sector, real estate and other services sectors. He said this is the first batch of potential taxpayers. However, he did not mention the number of people who will receive notices in the next phases.

When the PML-N came to power in 2013, former finance minister Ishaq Dar announced that it would bring 300,000 rich people into the tax net within three years.

However, the response to these taxnotices was insignificant. The state minister said he was not aware of the status of earlier notices. In 2016-17, the Federal Board of Revenue (FBR) received 1.14 million income tax returns.

Pakistan has signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matter, which binds 105 member countries to share details of assets of individuals with their native countries.Pre-empting a global crackdown on tax evaders, Pakistan is also considering a proposal to offer an amnesty scheme to such people.

Mr Afzal said the government is working on various proposals to help Pakistanis bring back their money from abroad. He said the scheme will be offered after thorough consideration.

He was not sure whether it will be possible for the new team toreopen the debate on the muchawaited National Finance Commission Award.

To curtail imports, he said the regulatory duty will slow down the arrival of foreign goods from next month. He said such measures will not only enhance the revenue collection but also offer protection to local manufacturers.

The state minister was optimistic that the country will achieve 5.8 per cent GDP growth comfort-ably. He said the growth rate may exceed the target.

Mr Afzal was also optimistic that the budget deficit will be contained at 5pc. The state minister categorically denied that the country is going to borrow from the International Monetary Fund. He said the government has an alternative plan to meet expenses.

He said growth in remittances is expected going forward. He also noted that large-scale manufacturing is posting impressive growth.

As for the next budget, he said it is the right of the PML-N government to present the fifth and last budget. However, he said he is not sure whether it will be legally possible for the incumbent government.

Mr Afzal said it will be difficult for the interim government to present a national budget.

He said the government has taken several steps to facilitate exporters. However, he added that it is not possible for the government to give subsidies.

Although there has been an increase in the import bill, the minister said, a significant chunk of imports is industry-oriented.

This will help the country develop inthelongrun,he added.

On the issue of oil prices, he said fuel consumption in Europe has increased due to harsh winter. It has led to an oil price hike, he said, adding that the rates will come down once the season is over.

The minister also stressed the need for removing the impediments that have reduced exports to Afghanistan.