Pakistan economic fundamentals strong: Miftah Ismail

KARACHI: Dr. Miftah Ismail, Adviser to Prime Minister on Revenue, Finance and Economic Affairs on Saturday said Pakistan’s economic fundamentals are very strong and the GDP growth likely to hit 10-year high at 6 percent this year.

He was addressing at a panel discussions organized by Institute of Chartered Accountants of Pakistan (ICAP). The panelists were included Asad Ali Shah, former ICAP president, Ashfaq Tola, Chairman Taxation Committee of ICAP, Waqar Masood, former finance secretary and Arif Habib, CEO of Arif Habib Limited. The moderator of the discussion was Ehsan A Malik, CEO Pakistan Business Council.

Dr. Miftah Ismail said the economic growth was remained buoyant. However, the fiscal deficit and current account deficit were bothersome. He said there is need to curtail budget deficit around 5 percent this year in order to create fiscal space for development expenditures.

Talking about planned amnesty for undeclared foreign assets, he said there were misconceptions about this amnesty. “Through this amnesty the government is trying to stop all the continued amnesties on transfer of foreign remittances,” he added.

He said that the current account deficit was reached to alarming level due to lower exports and high imports. The adviser admitted the government weakness in maintaining real nominal exchange rate for a long time.

According to him the exchange should be decided by the market forces instead of the regulator.

Dr. Miftah said the government will clear all sales tax refunds and customs rebates of exporters by February 15, 2018 and from next budget the government will formulate policy to avoid generation of refunds.

He also said the government had introduced many initiatives including levy of regulatory duty to discourage import of unnecessary and luxury imports. He, however, said the government was considering to withdraw regulatory duty on many items in the upcoming budget.

He said that broadening of tax base was priority of the government and in this regard many sectors had been identified.

Earlier, in his welcome address President ICAP Riaz Chamdia said there is need to resolve problems to the economy. He said there were issues of tax refunds and circular debt. He stressed the need for enhancing tax base for better revenue collection. Further, he said there is need to focus on new industrial zones.

Riaz Chamdia said the development of Gwadar port will benefit the national economy.

Ehsan Malik, on the occasion said the share of manufacturing sector was depleting which needs attention. To increase the share the government should focus on trade, manufacturing and energy policy, he suggested.

Arif Habib in his remarks suggested reducing cost of business. He also suggested incentives for business activities and investment in the stock market.

Asad Ali shah said one time amnesty should be extended to foreign and local undeclared assets. Ashfaq Tola explained many areas which required attention of the government to reform taxation.

Waqar Masood gave details about Pakistan’s loan programs with IMF.