Pro-growth incentives cause shortfall in FBR revenue collection: Dar
in the first eight months was due to pro-growth incentives offered to various sectors of the economy, particularly exports and agriculture.
The major reason for revenue gap amounting to Rs 100 billion was due to not passing on the full impact of petroleum, oil and lubricants (POL) prices to the common man, he added.
He said that Pakistan had undertaken two important initiatives. First, on March 21, 2017, it signed the revised Avoidance of Double Taxation Agreement with Switzerland. Second, on September 14, 2016, it signed the OECD's Multilateral Convention on Mutual Administrative Assistance in Tax Matters. The initiatives would help reduce and prevent tax evasion in future.
Despite reducing fiscal deficit over the last three years, the minister said allocation for Public Sector Development Programme (PSDP) had more than doubled and during FY 2017, the budget deficit (borrowing) would be only for its development spending, which was a milestone achievement.
He said the current account deficit increased to $ 5.5billion in Jul-Feb FY17. This was largely due to a sizable increase in imports of capital goods, along with delayed receipts of Coalition Support Fund (CSF).
Ishaq Dar said the rise in overall import payments was mainly driven by increased purchases and higher prices of fuel.
However, there was significant increase in capital goods imports, which, he added, would lead the economy to a higher growth path.
He said foreign exchange reserves at present were hovering around $ 22 billion, which were expected to reach over $ 23 billion by end of June, 2017.
"The government is committed to support the poor and the most vulnerable segments of population through BISP. Social safety net expenditures have increased by over 300 per cent through the four budgets of the current government," he added.
He said significant expansion in allocation to BISP had taken place, which was enhanced from Rs 40 billion in FY 2013 to Rs 115 billion in FY 2017 leading to increase in coverage from 3.7 million to 5.45 million families.
Annual stipend, he said, had also been enhanced from Rs 12,000 to Rs 19,336 during the period, while more than Rs 299 billion was disbursed among the poorest families, as unconditional cash transfers.
"We continue to diversify financing from both domestic and external sources, lengthen the maturity profile of domestic debt and improve the balance between domestic and external debt," he said, adding, " To achieve these objectives, we have already published Medium Term Debt Management Strategy (MTDS) and are monitoring its implementation through preparation of risk reports on debt management."
He said deepening of the energy sector reforms continued to be a priority agenda of the government. The prime minister, he added, lead regular monitoring of the efforts through the Cabinet Committee on Energy.
"We have added LNG to the system and are in the process of adding new terminals for its further imports," he said, adding that performance of the banking sector remained steady with high credit growth, improved assets quality, robust solvency and reasonable earnings.
Dar said implementation of the doing business reform strategy, 2016 had earned recognition for Pakistan as one of top ten reformers in the world. Substantive reforms continued to be taken in all areas, especially in paying taxes, starting a business and registration of property.
He said the government was committed to continue its work to make Pakistan financially and digitally inclusive country.