Govt has to take tough measures to meet IMF condition to get $6bn loan,
economic situation is critical; Imran Khan. Army also cuts its hefty budget
Nation special report
ISLAMABAD: In order to meet the conditions and requirements of International Monetary Fund (IMF), Pakistan Government has decided to impose new taxes for between Rs. 7bn to Rs75bn in new federal budget due to be announced on Tuesday, June 11.
According to informed and media sources, the government in accordance with the income (revenue) tax bureaucracy create detailed project plans to put new taxes 7 billion to 75 billion in the coming fiscal year budget 20-2019. Revenue this project was presented in the last round of talks with the International Monetary Fund (IMF).
The plan that was not due to changes in the approval by the Cabinet, which is yet to be done in the first week of May, but the most important positions. In this regard, the Chairman of the FBR sessions Zaidi said while it was not said that IM provides services typically the revenue plan through their eyes or not, but he told Don mention “we are providing guidance can be expected to meet the financial targets for the coming year and how much tax will meet the targets that are the focus.
Sessions Zaidi has repeatedly stressed that it will not strictly on existing taxpayers, they are paid 300 companies, 85 percent in Pakistan, said that means the tax that it not take any responsibility for any tax. ‘billion 50 million tax measures will be taken.
The IMF gave the government 50 billion rupees to 50 billion revenue target for the year, however 20-2019 FBR reduced demand of 50 billion to 50 billion or 20 billion had.
The revenue measures is the initial estimate and may change before the budget was introduced on June 11 held. This estimate was based on the earnings estimates will grow the economy by 4 percent and inflation rate of 9.4%, while revenue growth will be 13.4 percent.
If you follow these steps 22-2021 year, the year IMF program expires, the tax rate of the country’s GDP will grow by 15.4 percent, while the increase in the number of taxpayers 19 million is estimated to be 26 million.
In rare move,
Pakistan’s powerful military has agreed in a rare move to cut its hefty budget
for a year to help ease the South Asian country’s “critical financial
situation,” Prime Minister Imran Khan said.
Pakistan has struck an agreement in principle with the International Monetary Fund for a $6 billion loan but Islamabad is expected to put in place measures to rein in a ballooning fiscal and current account deficits to get access to the funds. The IMF has said the primary budget deficit should be trimmed by the equivalent of $5 billion, but previous civilian rulers have rarely dared to trim defense spending for fear of stoking tension with the military.
Unlike some other civilian leaders in Pakistan’s fragile democracy, Khan appears to have good relations with the generals who have ruled the nuclear-armed nation for nearly half its history since independence in 1947.
Pakistan’s de facto finance chief, Hafeez Shaikh, on June 11 is due to announce spending plans for the financial year beginning in July. Under Pakistan’s devolved system, the federal government must hand over more than half its budget to the provinces, and the remainder is mostly eaten up by debt servicing and the military’s vast budget.
Khan late on Tuesday tweeted that he appreciated the military’s “unprecedented voluntary initiative of stringent cuts in their defense expenditures” for next financial year because of the country’s “critical financial situation.”
This will allow money to be spent on the development of the tribal regions bordering Afghanistan, still recovering from more than a decade-long Islamist insurgency, and violence-racked Baluchistan province, Khan added.
The previous government hiked military spending by 20 percent to 1.1 billion, but the military appears to have overshot that figure amid a flare up in tensions with India. Khan did not say by how much defense spending would be trimmed.
A military spokesman said the “voluntary cut” in the defense budget for a year would not be at the expense of security. “We shall (maintain) effective response potential to all threats,” he added on Twitter.
Pakistan has one of the world’s largest armies but critics say the military’s spending is unnecessary and holds the country back in key areas such as health and education. More than 40 percent of the population is illiterate.