Jul 1: Advisor to Prime Minister on Finance Dr Abdul Hafeez Shaikh on Monday said that there was no agreement with International Monetary Fund (IMF) on exchange rate.

He said people were spreading speculations about the exchange rate but “I am clearly saying that there is no agreement with IMF about fixing the exchange rate at a certain level,” he said while speaking in ARY news along with Prime Minister Imran Khan and Chairman Federal Board of Revenue (FBR) Shabbar Zaidi.

He clarified that nobody knew the real value of exchange rate and no body can predict or fix the exchange rate at a certain level because it is always determined by the market itself.

He said when the government took over, annual Current Account Deficit surged to $20 billion and the country was to pay external debts of around $100 billion which were being paid and in 2018-19 alone, the government repaid external debts worth of $10 billion.

The Advisor said the current account deficit was pushed down to $13 billion in previous fiscal year which would be further reduced to around $7.5 billion by end of current fiscal year.

“Our focus is on reducing imports and increasing exports to ease pressure on exchange rate,” he said adding elevating exports was no doubt a dominant factor of increasing foreign exchange reserves, therefore the government had not imposed any tax on the sector in budget for financial year 2019-20.

To a question, Hafeez Shaikh said All Pakistan Textile Manufacturing Association (APTMA) was not coming out for protest against the government as “We are in continuous contact with the business community in this regard”.

He pointed out that government had already announced to provide subsidies on gas, electricity and loans for export oriented industries besides zero rating thousands of raw tariff lines imported by the industrial sector.

To a question with respect to short fall in revenue collection, Shabbar Zaidi clarified that main reason behind the shortfall was that unlike the past practice, this time the FBR did not retain the advance taxes of the people to show higher revenue collection.

He said industrial sector contribution in the country's economy consisted of 21% while its contribution in taxes was around 70%, while on the contrary the services sector such as doctors, engineers, lawyers, and IT professional comprised of around 60% however it contributed only 3% of total taxes in the country.

He said through reforms, the FBR would try to balance the tax contribution by collecting taxes from all sectors equally.

The Chairman FBR said “we have established a benami commission which is fully authorized to confiscate all benami properties across the country after expiry of the asset declaration scheme”.

He clarified that the people who had property on their own name but had not declared yet, would be taxed by bringing them to tax net while the people whose property was on the name of someone else would be confiscated.

APP

28689