June 16, 2023 (MLN): The government is fully committed to the IMF program and is keen to at least complete the 9th Review, the Ministry of Finance said in a statement issued on Friday.
The coalition government has already taken many difficult and politically costly decisions in this context.
“We are not “doctrinaire” about any element of the Budget FY24 and are keenly engaged with the IMF to reach an amicable solution,” it reads.
While reviewing the press statement of the Resident Representative of the IMF, the ministry said that the negotiations with IMF are ongoing.
“However, since some specific issues have been raised in the press, we think that it would be appropriate to clarify our position on these issues,” it added.
“Before we go into the specific issues raised in the Press statement it is important to give the context of these talks. The 9th IMF Review was conducted in early February 2023 and GoP completed all technical issues at a fast pace,” it noted.
The only outstanding issue was of external financing which we understand was also amicably resolved in the Prime Minister’s telephonic call of May 19, 2023, with the M.D. of IMF.
Though the Budget FY24 was never a part of the 9th Review, however in line with PM’s commitment to the MD IMF, we shared the Budget numbers with the IMF Mission.
On the specific issues raised by Ms. Esther Perez, the government’s position is as under:
As far as the broadening of the tax base is concerned, the FBR has added 1,161,000 new taxpayers i.e. 26.38% to its tax base in the last 11 months.
This is an ongoing exercise and will continue. The 0.6% advance adjustable withholding tax on cash withdrawals over Rs50,000 is another big step in this direction.
The tax exemptions that have been announced in the Budget are “triggers” of growth in the real sectors of the economy. This is the sustainable path to provide employment and livelihood to the common citizen. In any case, the amount is fairly small.
On BISP allocation, the pro-poor initiatives in the Budget are not limited to BISP beneficiaries whose budget in any case has been increased from 400 to 450bn. (This was last raised by GoP in Feb 2023 from Rs350 to Rs400bn).
There are millions of vulnerable people above the poverty line and the Budget provides Rs35bn for targeted subsidies on five main items of food consumption through the Utility Stores Corporation for families up to a PMT scorecard 40. This facility is also available for BISP beneficiaries.
As far as the “amnesty” is concerned the only change is to “dollarize” the value of an existing provision of the I.T. Ordinance. This facility, which has always been there, is available under section 111(4) of the I.T. Ordinance. The cap of Rs10mn (approx. $100,000 equivalent) was introduced in FY16.
The cap set in FY 2016 is being resolved in terms of the rupee equivalence of $100,000.
Copyright Mettis Link News
Posted on: 2023-06-16T16:25:22+05:00
