Finance Minister Shaukat Tarin addressed the Business Community of Karachi at the Karachi Chamber of Commerce and Industry insuring them that from now on, the business community will be a partner in the policy consultation process.
This came following Prime Minister Imran Khan’s initiative to hold consultations with the business community.
“I don’t believe in committees,” said Tarin, adding that he is meeting the trade body after meeting the SBP officials. “If the government’s economic policies are better, there will be investment,” he added.
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He assured the business community that their voices are being heard, and some things had been addressed under the June 2021 budget.
“[For] the budget, I tried to consult everybody in the business community, tried to accommodate as much as I could, while remaining within the framework of the IMF (International Monetary Fund),” he said.
“At times, I even flouted some of those areas [as] you know IMF is not happy on a couple of things, but I still tried to move forward,” adding, “I have taken a stance with the IMF for not imposing taxes. We avoided taxes up to Rs 700 billion despite the IMF asking us to do so.”
Finance Minister Tarin said that it is the government’s responsibility to take the business community forward so that more investment is generated in the economy.
Talking about the power sector, the finance minister said that he believes the energy sector to be the government’s “Achilles heel”, and it would take at least five to seven years to resolve the issues the sector was facing.
He said that the major problem was the excess capacity that has been built, and it will take Pakistan five to seven years until demand rises to meet the supply.
Tarin was quick to point out, however, that the problems faced by the sector are the result of the actions taken by the previous governments and the Imran Khan government is only trying to fix the problems faced today.
The finance minister, however, assured that the energy minister and his team were trying their best to address the problems and policy decisions in this regard would be taken in the coming few months.
Talking about increasing the tax base, the finance minister said that technology will be used to help in this regard.
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He additionally added that the government has collected data for taxpayers, and even unregistered voters, which had been collected from various sources and said that the government can tell the income level of individuals and how much tax they pay with 80-90 per cent accuracy.
Finance Minister said that the government has as many as 15 million profiles including unregistered voters with Nadra and 7.2 million names with the FBR.
Tarin went on to assure the businessmen that the days of harassment by the Federal Bureau of Revenue (FBR) were over, as under the new system of assessment would be self-administered and the audits will be conducted by a third party.
“We will seek the services of 1,500 professionals from the ICAP (Institute of Chartered Accountants of Pakistan) for the audits,” he said, adding that defaulters would firstly be sent warnings to pay their taxes, and only after the people still didn’t pay taxes, will they be arrested.
He said the mechanism had to be supported from the people’s side as well, adding, “It’s about time that people who are not paying taxes start paying taxes because otherwise, people like you and I suffer.”
Talking about the recently introduced system of prizes, the federal minister said that a new mechanism would also be introduced to ensure proper recovery from the retail sector under which prizes would be given to consumers for ensuring that they collected receipts from retailers.
The elephant in the room, inflation, and specifically food inflation was discussed. Once again, the minister pointed at the failure of the previous governments quoting the change in figures of cotton bales production between Pakistan and India over time.
He said, “Food inflation is rising due to international prices as we are a net importer of food now.”
The minister said administrative and market measures were being taken to address the problems and build infrastructure in the agriculture sector.
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Regarding core inflation, Shaukat Tarin said that this did not come under his jurisdiction, and the State Bank of Pakistan was the regulatory authority.
He added that as the core inflation remains at 7%, he does not see a downward revision in the policy rate anytime soon.
Finance Minister Shaukat Tarin said the Economic Advisory Council has identified as many as 14 areas, including industry, agriculture, CPEC, and energy, etc. He said that after 1972, economic planning was abandoned as the Planning Commission was dismantled resultantly the country lacked effective long-term and medium-term plans.
Tarin said Prime Minister Imran Khan would be briefed on the progress of those plans in monthly meetings.
He added that a cell would also be established in the finance ministry and the help of analysts from the Pakistan Institute of Development Economics would be sought to organize the meetings.