Nov 27 - Dec 03, 2000

Govt to get Rs436 billion revenue: Shaukat

Minister for Finance Shaukat Aziz on Thursday assured the visiting vice president of the World Bank, Ms Mieko Nishimizu, that the government will achieve its Rs436 billion revenue collection target, despite a Rs4 billion shortfall that occurred during the first four months of 2000- 2001.

Informed sources told the finance minister said that efforts were being made to collect an additional Rs90 billion during the current financial year to also achieve the 5.2 per cent GDP budget deficit target.

The issue of the filing of 30 per cent less income tax returns this year was also discussed, with Mr Aziz saying that notices have just been sent to those who did not file their income tax returns despite having their fair income. Also underfilers had been sent similar notices.

The visiting World Bank president was told that the Task Force on the restructuring of the Central Board of Revenue will give its report early next year to greatly improve the functioning of the organisation, especially with a view to increasing revenues and plug leakages.

The finance minister also said that the government has worked out a detailed plan to reduce the level of poverty in Pakistan. And as a first step, he said, the government has established a Micro Finance bank with an equity of Rs 2 billion.

He said that the government planned to offer more money to the bank in case revenue generation was improved by the CBR.

Sources said during the meeting in which other senior officials of the ministry of finance were also present, the issue of poverty alleviation was discussed in detail. Mr Aziz told the World Bank vice president that Pakistan was interested in funding for the Poverty Reduction Growth Facility (PRGF).

He expressed hopes that the proposed 620 million dollar IMF loan under Standby Arrangement (SBA) will be converted into a 2 to 2.5 billion dollar PRGF.

Export of wood items on agenda

The federal government is expected to allow the export of wood products made out of sustainable forest woods, sources said on Wednesday.

The federal ministries of commerce and environment have jointly submitted a report in this regard to the Economic Coordination Committee (ECC) of the cabinet, which is meeting on Saturday after a month with Finance Minister Shaukat Aziz in the chair.

The items which are being allowed to export include timber doors, window frames, flush doors, panel doors, mouldings, beading pallets, crates and cable drums in knock down condition, broom sticks and floorings, all made from sustainable forest wood.

However, the government has decided that it would be mandatory for exporters to ensure that the value of export product should be at least 100pc more than the value at which the timber was purchased from factory.

Banks to rollover $750m deposits

Pakistan has got bulk of its $1 billion worth of foreign currency swap deposits rolled over for a second term of two years. These deposits were raised mostly by foreign banks operating in Pakistan from the international market before May 1998 when Pakistan went nuclear and mobilization of such deposits stopped.

Bankers said banks and other financial institutions agreed to rollover 75 per cent of existing $1.072 billion worth of foreign currency swap deposits in the first year and 75 per cent of then remaining deposits the next year. In other words foreign banks and some financial institutions operating in foreign partnership would roll over swap deposits of $750 million up to March 2002 and that of $562 million up to March 2003. In other words the SBP would have to pay $250 million of the existing $1 billion swap deposits up to March 2001 and another $187.5 million up to March 2002.

Internet bandwidth rates reduced

Federal Minister for Science and Technology Prof Atta-ur-Rehman on Tuesday announced further reduction in Internet bandwidth rates up to 50 per cent for the software companies, IT firms and Internet Service Providers (ISPs).

Addressing a crowded press conference at PID Press Centre, the minister said that government has reduced the bandwidth rate from $32,000/Mb to $3,600/Mb. He said that about six months ago the government had reduced the Internet bandwidth rates by 53 per cent.

IMF not satisfied with income tax returns

The IMF has expressed concern over the filing of 33 per cent less income tax returns this year, and said that the continued "grim" tax collection situation could jeopardize the proposed $620m standby arrangement.

Sources in the multilateral agency told on Monday that the "biggest disappointment" was the filing of 300,000 less income tax returns which showed that the business community was not ready to pay taxes. The situation had worsened and alarmed everyone as the government had failed to bring 100,000 new taxpayers into the net as was planned, they added.

Package for FCA holders

The government is in the process of preparing a package for foreign currency accounts holders in Pakistan, ensuring not to freeze their accounts in future.

"The package will assure not to repeat the previous sad story of freezing foreign currency accounts this time", he told reporters during the launching ceremony of FUCHS lubricants in Pakistan at a local hotel on Tuesday. He asked the foreign investors and Pakistanis living abroad to bring their capital to local and foreign banks of Pakistan without any fear.

Software exporters to retain earnings

The State Bank of Pakistan (SBP) on Saturday allowed software exporters to retain 35 per cent of their export earnings in special foreign currency accounts with the authorized dealers (banks).

An SBP circular (F.E. No.25) said that software exporters would use such funds for payment of commission to overseas buyers and to meet other expenses such as promotional publicity, import of hardware/software and foreign consultants fee etc.