IMF okays reform agenda
The visiting five-member IMF review mission has approved the reform
agenda of the government, specially the broadening of tax net.
Official sources said on Monday that the first round of talks between
the review mission and the senior officials of the government had concluded, with Sena
Ekin, the leader of the mission, approving the reform agenda that also included
stabilization programme and microeconomic framework.
The mission has appreciated the government's move to collect additional
Rs100 billion in the next fiscal year by recovering General Sales Tax (GST) from smart
traders and ensuring effective levy of tax on agriculture income.
Basically, the mission was not here to discuss Pakistan's funding
requirements, both for balance of payment support and a new Poverty Reduction and Growth
Facility (PRGF). Nevertheless, the sources said, the government gave its priority to
pursue the new PRGF programme and improve its fragile foreign exchange reserves, which
stand at $1.23 billion.
He said the IMF's support was necessary in not only improving the
reserves and launch the new PRGF programme but also for seeking fresh loans from foreign
Pakistan is hopeful it will get a three-year 2.5-billion-dollar loan
package from the IMF, Finance Minister Shaukat Aziz told AFP.
The IMF suspended a previous 1.56bn dollar loan programme last year.
Pakistan badly needs the new credit before payments of $4.6 billion on
its 38-billion-dollar foreign debt becomes due next year, financial sources said.
The Asian Development Bank (ADB) had approved 2.8 billion dollars in
assistance over three years but its disbursement had been linked to resumption of the IMF
lending, they added.
IMF team briefed on poverty reduction plan
Talks between the government and the IMF review mission entered the
second phase on Thursday during which Islamabad briefed the mission about the Poverty
Reduction and Growth Facility (PRGF) programme.
Official sources told that a detailed discussion was held between the
head of the mission, Sena Ekin, and the secretary general of the finance ministry, Moeen
During the last 10 days, both sides discussed the compilation of
figures, including those of budget deficit, revenues, exports, balance of payment position
and foreign exchange reserves.
"Preliminary discussion on the PRGF programme has started, which
did not include the size of the programme, a source said.
He said it was wrong to presume that both sides had discussed the size
of the programme to be $2.5 billion dollars. There was no definite figure. "There is
no prior assumption about the size of the new programme which will replace the old
Countrywide tax survey launched
Tax survey aimed at documentation of economy started in main cities of
the country on Saturday with most markets giving a poor response to it and small traders'
organization calling for a two-day strike from Monday.
The Karachi traders ignored the shutter-down call given by the small
traders' association. There was no panic in major commercial centres and financial markets
as was witnessed before the launch of the survey allaying fears of a possible clash with
the officials, a visit to various business centres by Parvaiz Ishfaq Rana indicated.
All the major shopping centres remained open and so were retail shops
as army-led teams were welcomed in their respective zones.
More taxes to come under SAS
Minister for Finance Shaukat Aziz said on Thursday that the government
would be introducing wide range of tax measures, including introduction of self-assessment
scheme (SAS) for filing of other categories of taxes and reduction in number of provincial
Addressing business leaders during his visit to Institute of Textile
Technology and Management (ITTM) he, while justifying the need of tax survey, said that
the country could not be run with a huge budget deficit running up to Rsl80 billion.
Palm oil duty review
National Tariff Commission has decided to review the tariff structure
pertaining to digit exchanges and crude palm oil.
Two applications have been received by NTC, one from Alcatel Pakistan
Ltd. and the other from Evian Fats and Oil. Alcatel have demanded protection against the
import of digital exchanges at 35% duty. Raw materials, components and
modules/subassemblies are importable at 10%, 15%, and 25%, respectively. The industry has
sought review of the duty structure allowing cheaper imports.
Pakistan State Oil and Pepsi Cola International (Pvt) Ltd Pakistan
(Pepsi) have announced the formation of a marketing alliance. They would now collaborate
in joint promotions and marketing campaigns for PSO's convenience stores (Shop Stop) at
PSO retail outlets.
Textile Policy will be announced by June 15, according to official
sources on Wednesday.
The policy, tailored by Small and Medium Enterprise Development
Authority, is aimed at the formulation of a long-term strategy to transform Pak textile
sector into a market driven, innovative and dynamic one which would be internationally
integrated and globally competitive.
The government has appointed Muzaffar Iqbal, senior executive vice
president as president of the National Bank of Pakistan on acting charge basis.
The Central Board of Revenue has announced that it is issuing a new
National Tax Number (NTN), carrying special security features, to serve as a taxpayer
New trade policy
The new Trade Policy of Pakistan to be unfolded by the government soon
will be valid for five years and will aim at accelerating trade liberalization, federal
commerce secretary Mirza Qamar Beg has stated.