Hafeez hints at new taxes in budget

WB agrees to postpone imposition of 6pc raise in power tariff

WASHINGTON: The World Bank has agreed to postpone the decision of a 6 per cent raise in power tariff following successful negotiations with its representatives, a top government official said.

Addressing a press conference at Pakistan Embassy in Washington, Adviser to the Prime Minister on Finance, Hafeez Shaikh said that there is a likelihood that the International Monetary Fund (IMF) will approve the release of the fourth tranche of $1.3 billion out of $11.3 billion agreed in November 2008 to Pakistan, following its board of directors meeting scheduled to be held on May 14.

Pakistan is committed to fulfill its obligations and commitments made with the global financial institutions and the government will implement the decision at a later stage, he said.

“The IMF management not only listened to us, but also accepted our point of view and allowed us to review the situation rather than increasing the power tariff immediately,” the adviser said.

For the last few years, the country faces tough situation as the GDP growth remained around 2 per cent and inflation went up to 25 per cent, he said, adding that now things are coming under control as inflation has come down to around 12-13 per cent.

“World leaders have accepted that there is political stability in Pakistan and the country is heading towards the right direction,” he said.

In response to a question, he hinted at introduction of new taxes in the coming budget, besides reforms in the public sector development. “We have made commitments to increase our tax net. Besides we need to carefully assess the development schemes, which are made part of the budget at the last moment,” he added.

At present, tax revenue is only 10 per cent of the country’s GDP, which is alarming, Shaikh said, adding, “We need to find ways to increase our tax revenue and it could be done by imposing some new taxes.”

Pakistan has not made any promise with the United States to finalise the transit trade agreement with Afghanistan, the adviser said.

The existing agreement with Afghanistan on the transit trade will continue, he said, adding that in case Afghanistan wants to amend the agreement it will require negotiations and the final decision will be taken in view of the national interest, the adviser said.

During his four-day stay in Washington, Shaikh said he met around 40 officials of different countries, including China, Saudi Arabia and Iran.

The Chinese and Saudi Arabian investors will be invited to Pakistan to explore investment opportunities in the power sector, he said and termed his meeting with US Ambassador Holbrooke beneficial.

Source The News