Web Desk (LTN NEWS): Restarting the IMF program will bring stability to the whole economy. The country’s finance minister, Miftah Ismail, said that macroeconomic stability is on the way because the International Monetary Fund (IMF) program will start up again at the end of the month. He said that all conditions have been met for this to happen.
A press release from the PSX on Tuesday says that he said these things during a meeting with PSX officials, government officials, and businesspeople.
PSX Chairperson Dr. Shamshad Akhtar, Securities, and Exchange Commission of Pakistan Chairperson Aamir Khan, PSX CEO and Managing Director Farrukh H. Khan, Federal Board of Revenue (FBR) Chairperson Asim Ahmad, State Bank of Pakistan (SBP) Deputy Governor Dr. Inayat Hussain, Special Secretary Finance Awais Manzoor, and key stakeholders including Arif Habib Group Chairman Arif Habib, Pakistan Stock Brokers Association & AKD
According to the press release, the meeting was about Pakistan’s macro economy, capital markets, taxation, and non-tax measures.
Ismail said that the country’s balance of payments was “well under control,” and it may even have a surplus in the coming months because of more hydropower, lower energy needs, and lower oil prices.
“There will be strict fiscal discipline, and all new spending will be paid for in full by tax increases.”The 10% super tax will only be in place for one year while other ways to make money are found,” he said.
He also said that the advances-to-deposits ratio-linked tax on banks won’t be put in place backward, and that tax money from the retail sector is expected to be much higher than it was last year.
The minister also set up three committees. The first would share the private sector’s view on interest rates with the SBP’s Monetary Policy Committee. The second would work with the Pakistan Business Council and the PSX on all tax issues.
The third would look at the listing of development finance institutions (DFIs), the issuance of debt and Sukuk, the reform of the National Savings Scheme, and the possibility of creating a market for exchange rate forward contracts.
The press release said that Ismail promised to look at the progress and meet with the people involved again in two weeks.
For his part, PSX MD Khan told the finance minister that the situation in the capital markets needed to be dealt with on a “war footing.” He said that state-owned enterprises (SOEs) were “extremely profitable,” but that they only paid out 18 percent of their profits. The people who took part asked for the payout rate to be raised to 50%.
Ismail then told the right ministry to get together with everyone involved right away to talk about the problem.
The people at the meeting said that listed companies had to pay taxes on their income twice, while unincorporated businesses had to pay taxes that were much lower. They were also worried about the tax on capital gains (CGT).
“The finance minister was very open to everything that was said. In particular, he asked the FBR to look into any problems with the CGT regime and the way tax credits are given to companies that just got listed. He asked SECP to look at the investment limit and AML (anti-money laundering) requirements for Sahulat Accounts,” a press release said.
