Advisor to PM on Finance Hafeez Sheikh says the goal of privatization is yet very far pointing out that the government expects to generate $2 to $3 billion after the pandemic was over.
ISLAMABAD: (UrduPoint/Pakistan Point News-May 20th, 2020) The government would not impose any new taxes in the upcoming budget for the fiscal year 2020-21 to facilitate the industry and help check contraction of economy, said Advisor to PM on Finance Hafeez Sheikh here on Wednesday.
He said that the government would not take any tax measure that overburdens the industry, pointing out that there was need to help expand economy, instead of enhancing tax rates at this difficult time of Coronavirus.
Hafeez Sheikh said the government would rather provide incentives to the sectors that could create more job opportunities and the sectors that generate activities in many related industries to have multiple economic effect.
He expressed these views while talking to a local tv.
The PM Advisor said that the example of construction sector, for which the government had already announced a relief package to boost economic activities and provide employment opportunities.
“ The existing export incentives would not only be kept in track but would also be enhanced,” said Advisor to PM, adding that the government would also zero rate different tariffs. He said that the government would also decrease various duties on import of raw materials to reduce the cost of doing business.
He went on to say that the efforts would be made to maintain the subsidies provided in the corona period to ensure liquidity to commercial and industrial units through various initiatives. He also stressed the need for enhancing non-tax revenues, adding that during the current fiscal year, the country had surpassed the Rs1.1 trillion collection target of non-tax revenues.
Sheikh state that the exports from the country would definitely suffer due to Coronavirus, fearing that the country’s exports would not increase as needed despite government initiatives and efforts at domestic level due to global crisis.
He said that the government needed to work hard as IMF had predicted that the global GDP would contract at least by 3%, hence export demand would be reduced.
He further said the government, through fiscal stimulus package, was providing liquidity to people and SMEs sector and had been providing Rs144 billion to the affected people through its Ehsaas programme, out of which Rs90 billion have been already disbursed while it was procuring 8.3 million tons of wheat. He said that a transparent mechanism has been developed to ensure the amount reaches to the deserving people,
The adviser was of the view that when the liquidity comes in the hands of people, it generates demand and helps keep the economic activity going on. Answering to a question about remittances, he said that so far these were on tract and higher than the that of the corresponding period of last year, however during the last month, these witnessed about 6 percent decline.
He said that the Gulf countries, UK and USA, where overseas Pakistanis live and work, have been affected by the coronavirus pandemic, so the remittances would suffer.
Shedding light over expenditures, he said that government had well managed expenditures in the current fiscal year before the outbreak of the coronavirus as the Primary balance was positive this year.
“The goal of privatization is yet very far,” he said, adding that the government expected to generate $2to $3 billion after the pandemic was over.
He said since country was having low storage capacity to take advantage of the low oil prices, so a strategy for hedging was being worked out to benefit the country.
Hafeez Shaikh said that the government was expecting 7 percent fiscal deficit, however, since the tax collection has been affected and expenditures also went up due to coronavirus, so the deficit may cross 9 percent of GDP. However, he said that there were still two months left of the current fiscal year and the government was working hard to reduce it and keep it below 9 percent.
