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Finalization of IMF program will bring macroeconomic stability, says finance minister

Finance Minister Miftah Ismail has said that the finalization of the expected International Monetary Fund’s (IMF) program by the end of August would bring macro-economic stability to Pakistan.

Speaking with the leadership of the Pakistan Stock Exchange (PSX), the federal minister for finance and revenue claimed that the balance of payments issue was now under control, adding that the increased hydel power and low energy demand and lower fuel prices in the coming months, Pakistan could even have a balance of payments surplus after few months.

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Miftah Ismail said that following the fiscal discipline strictly, all additional expenditures would be funded by tax measures. He said that alternate revenue streams were being developed and the super tax at the rate of ten percent had only been imposed for a year.

The PSX management highlighted various issues including tax incentives to other asset classes and knowing your customer (KYC) requirements in the stock market. They told the finance minister that these obstacles were resulting in anti-money laundering and tax distortion amongst asseted classes.

Miftah Ismail had asked the Federal Board of Revenue (FBR) for immediate review over discrepancies in the capital gain tax and the issue of tax credit to newly listed companies.

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The finance minister also set up three committees for reviewing the matters discussed.

The first committee would share the perspective of the private sector with the State Bank of Pakistan (SBP) and the Monetary Policy Committee on interest rates. The second committee was set up to coordinate with Pakistan Business Council (PBC) and PSX on all tax issues. The third committee would coordinate the review of the listing of DFIs, debt, and Sukuk issuance, reform of NSS and explore the development of a market for exchange rate forward dealing which all market participants can access.

In the first committee, SBP Deputy Governor Dr. Inayat Hussain will coordinate with representatives of PSX and PBC. In the second committee, Member Tax Policy Afaque Qureshi will coordinate with PBC and PSX on all tax issues. In the third committee, Special Secretary Finance Awais Manzoor will coordinate along with Nasim Beg from the private sector.



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