ISLAMABAD: Prime Minister Shehbaz Sharif on Saturday asked Federal Board of Revenue (FBR) officials to re-evaluate and revise their strategy to enhance revenue collection to rid Pakistan of a massive public debt of $242 billion, Sharif’s office said.
The statement came hours after Pakistan reached a staff-level agreement with the International Monetary Fund (IMF) for a new $7 billion loan deal. Islamabad agreed in exchange to conduct further unpopular reforms, including widening the South Asian nation’s chronically low tax base.
Pakistan last year came to the brink of default as the economy shriveled amid political chaos, catastrophic 2022 floods and decades of mismanagement. The nation was saved by last-minute loans from friendly countries as well as support from the IMF, but its finances remain in dire straits with high inflation and staggering public debts.
Presiding over a meeting of officials at the FBR headquarters, Sharif called the revenue watchdog the “backbone” of the country’s economy and urged that sectors which were not paying taxes must be brought into the tax net.
“The prime minister issued the directives to immediately release Rs2 billion to develop the Web Based One Customs (WeBOC) System on modern lines,” Sharif’s office said in a statement.
He said the process of FBR’s digitization had begun and it would be completed in the most “comprehensive and coordinated manner,” promising full support to the revenue collection body in acquiring the latest technology.
Officials informed the participants that 4.9 million taxable persons had been identified in the country by using modern technology, according to the statement. PM Sharif directed increasing the tax base and bringing these persons into the tax net immediately.
During the 2024-25 fiscal year beginning on July 1, Sharif’s government aims to raise nearly $46 billion in taxes, a 40 percent increase from the previous year. It has used more unusual methods, including blocking 210,000 mobile connections, to compel people to file their tax returns. Islamabad also aims to reduce its fiscal deficit by 1.5 percent to 5.9 percent in the coming year.
But Pakistan’s public debt of $242 billion remains a huge problem for the South Asian country and servicing it may swallow up half of the country’s income in 2024, according to the IMF.
Pakistan asks authorities to revise revenue strategy to reduce country’s debt
https://arab.news/js284
Pakistan asks authorities to revise revenue strategy to reduce country’s debt
- The statement came hours after Pakistan reached a staff-level agreement with International Monetary Fund for a new $7 billion loan deal
- Islamabad agreed in exchange to conduct further unpopular reforms, including widening the South Asian nation’s chronically low tax base
Pakistan forecasts inflation to remain in moderate 5.5-6.5 percent range
- Finance Division report says robust remittance inflows, steady performance of IT, service sectors to cushion external pressures
- Consumer inflation in Pakistan has significantly reduced over the years when it surged to a record high of 38 percent in May 2023
ISLAMABAD: Inflation is expected to remain in the moderate range of 5.5 to 6.5 percent for December, the Finance Division said in its Monthly Economic Outlook report on Wednesday.
Pakistan reported inflation at 6.1 percent on a year-on-year basis in November as compared to 6.2 percent in October. Pakistan’s inflation rate rose to a record high of 38 percent in May 2023 on account of surging food and fuel costs as Islamabad scrapped subsidies as part of a financial deal agreed with the International Monetary Fund (IMF).
“Inflation is projected to remain moderate, in the range of 5.5-6.5 percent in December, primarily reflecting base effect,” the report said.
The Finance Division’s report said Pakistan’s economic outlook remains “positive,” driven by sustained growth in industrial activity due to continued momentum in textiles, automobiles, cement and food processing sectors.
“Robust remittance inflows and steady performance in IT and services exports are likely to cushion external pressures,” the report said.
The report said Pakistan’s current account recorded a surplus of $100 million while it posted a deficit of $812 million during the July-November period.
It said remittances increased by 9.3 percent to $16.1 billion in November, led by inflows from Saudi Arabia (24.2 percent) and the UAE (20.8 percent), while the net foreign direct investment inflows were recorded at $927.4 million during the same July to November period.
It said Pakistan’s fiscal consolidation is expected to continue supporting macroeconomic stability, with government efforts in expenditure management, enhanced tax collection and structural reforms contributing to sustainable growth.
“Overall, Pakistan’s economy is projected to maintain its positive momentum in the coming months, driven by industrial growth, improved governance, digitalization, and prudent macroeconomic management,” the report said.
