PML-N lawmakers criticize economic situation, inflation and dollar value
ISLAMABAD – Lawmakers from the ruling PML-N have raised concerns about the current economic situation in the country, especially the continued rise in the rate of inflation and the rise in the value of the dollar. The National Assembly’s Standing Committee on Finance and Revenue has expressed serious concern over the rising inflation rate and dollar value and summoned the finance minister to Ishaq Dar for the next meeting. The committee met under the chairmanship of Qasier Ahmed Sheikh. MPs from the ruling PML-N have expressed concern over the continued rise in the rate of inflation and the rise in the value of the dollar. PMLN MP Barjees Tahir said that gasoline, electricity and gas prices will rise further under the guidance of the International Monetary Fund (IMF). He added that the inflation rate had already climbed to 30%. He asked when the government will control the inflation rate to relieve the masses. Meanwhile, committee chairman Qaiser Ahmed Sheikh said inflation and the dollar value were out of control. He asked what reforms had been introduced by the current government over the past seven months. He said that the current government was continuously borrowing, which was not the solution to the economic crisis. Federal Board of Revenue (FBR) Chairman Asim Ahmed informed the House Committee that tax collection will be reduced in the coming months due to reduced imports and currency appreciation. He further said that the IMF is also calling for additional revenue generation measures to compensate for the tax collection shortfall. He informed that the FBR had collected Rs2149 billion in the first four months (July to October) of the current financial year against the target of Rs2144 billion. The RBF had met the income tax collection target but had not met the sales tax and customs duty targets in four months. However, the government may face a tax collection shortfall in the coming months as imports are expected to decline. He further said that the RBF is to raise Rs 5.321 billion in the remaining eight months (November to June) of the current financial year. However, it is unlikely that the goal will be achieved. Other reasons for reduced tax collection are increased interest rates, floods and reduction in development budget. The current political situation could also affect tax collection. He further said that the government is working to improve tax collection through administrative measures as there is currently no proposal to announce a mini budget. In addition, the Committee was also informed that to date, 2.581 million registrants have submitted declarations compared to 3.6 million registrants last time (although there is still time to file the declarations). The committee expressed concern about the lack of increase in the number of filers and the fact that taxes are only levied on existing filers. The committee also showed its apprehension regarding the tax regime in flooded areas such as Khairpur. State Minister for Finance and Revenue, Ayesha Ghaus Pasha, informed the committee that the country suffered massive losses after the floods. She said the country’s total gross domestic product (GDP) is expected to fall to 2% in the current fiscal year due to recent floods. The committee was informed that the country suffered a loss of $30 billion due to the recent floods. She said the government has so far spent Rs 120 billion to provide immediate relief to those affected by the floods. These include Rs25,000 per family under an income support scheme and a Kissan relief scheme of Rs600b. The Committee was also informed of meetings with the IMF and the World Bank. He was informed that the government had fruitful discussions with all multilateral stakeholders regarding the country’s economic situation after massive floods. The committee was informed that nine million people are expected to fall below the poverty line and that the growth rate will be lowered by 2%. Multilateral institutions have been responsive to the economic situation in Pakistan due to the floods and talks are underway to anticipate some programs. A positive response from multilateral institutions such as the Asian Development Bank, the World Bank and the Asian Infrastructure Investment Bank is expected.