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Pakistan progressing away from default, says Miftah Ismail

Finance minister says $17 billion current account deficit reason for revival of IMF loan program

Finance Minister Miftah Ismail that Pakistan was now on the path of progress away from a defaulting situation.

In an address to the National Assembly on Friday, Miftah Ismail announcing that the budget was farmer-friendly, adding that there had been no such budget in the past 10-20 years.

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The finance minister told the lawmakers that government was not imposing any indirect taxes, rather the rich had been taxed. He said that a promise had been made with the IMF for reduction of Rs1,600 billion primary deficit and conversion into Rs153 billion surplus.

Ismail said that tax target had been increased from Rs7.004 trillion to Rs7.47 trillion, and that the federal government would pay Rs4.37 trillion to the provinces after which the deficit would stand at Rs4.55 trillion with a net total deficit of Rs3.78 trillion.

Finance Minister said that Pakistan would become self-reliant in production of edible oil, wheat and other products resulting in long term benefits.

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Miftah said that the current financial year would be considered as bad in the history of Pakistan due to significant budget deficit and a shift away from targets. He said that the wide gap between expenses and resources caused a deficit 8.95 percent of the old gross domestic product (GDP).

The finance minister added that borrowing funds from others was a result of poor performance of the previous government.

He questioned that how could one talk of self-reliance, freedom and independence by taking loans worth Rs20,000 billion in three to four years.

Ismail criticized the subsidies given by the Pakistan Tehreek-e-Insaf-led government by saying that these had cost the country’s economy Rs120 billion.

The finance minister praised the coalition partners for standing together in a difficult time and supporting the decision of ending the subsidies on fuel and energy.

He told the NA session that the ongoing fiscal year’s current account deficit could reach $17 billion, due to which the revival of IMF loan program was necessary.

Miftah Ismail stated that gold retailers with shops of 300 square foot or less area would pay fixed income and fixed Rs40,000 sales tax whereas sales tax for bigger shops would be 17 percent to 30 percent.

He said that the government was trying to bring 250,000 to 300,000 retail shops out of a total of 900,000 into the tax net, adding that small shops would pay a fixed tax of Rs3,000 and big retailers would pay Rs10,000 tax every month.

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