ISLAMABAD: Finance Minister Shaukat Tarin has said that trade with Afghanistan will be done in Pakistani rupee (PKR) as foreign reserves of Kabul have been blocked.
Briefing the Senate Standing Committee on Finance, which met with Senator Talha Mehmood in the chair on Thursday, Tarin said that Afghanistan is facing a shortage of dollars as the International Monetary Fund (IMF) and the World Bank have seized its reserves after the fall of the previous Afghan regime.
He said that the government is monitoring the Afghan situation on a daily basis and Pakistan might send its team to the country to help the Taliban stabilise the economy which had suffered a major blow following international monetary organisations withholding the country’s $9 billion and also froze its financial assets. It will take a few weeks for Pakistan to know the effects of trade with the landlocked country, he added.
Talking about tax collection, the finance minister said that the government has data of 15 million people who should be paying sales tax and now a notice will be sent to them and if they fail to respond, authorities will take strict legal action. Tarin said that the Federal Board of Revenue (FBR) has stopped issuing notices to the tax defaulters.
He claimed that the country’s economy is improving which would further increase the growth rate. He, however, admitted that the country’s import bill witnessed an increase in August. “There is a monthly review of the country’s overall economic situation, including its imports and exports,” he said, and added that the governments in the past used to turn to international money lending organisations such as the International Monetary Fund (IMF) because the economy in their times was not growing at a reasonable pace.
He added the government plans to take the country’s GDP growth which is currently at 4 percent to 4.8 percent in the ongoing financial year 2021-22. He informed the Senate body that Pakistan’s trade deficit stood at $4 billion.
Answering a question regarding depreciation of Pakistani rupee, Tarin said that artificially maintaining exchange rate has negative effects. He added that the exchange rate is currently in the same position it is supposed to be.
Tarin was of the view that rupee’s depreciation in 2018-19 took its toll on the economy. “Presently, the inflation rate is 8.4 percent while the food inflation stands at 10.50 percent,” he said, and added, “The prices of food items is our biggest concern. There are times when prices of food items go up in the entire world. And we are passing through the same phase, and will control it.”
The finance minister said that ghee prices registered an increase of 90 per cent during the last year while pulses 40 to 50 percent. “These are the items which we import from other countries,” he clarified.
He informed that Kamyab Pakistan Programme would soon be launched. “We will launch the programme for the country’s poor. Earlier, the IMF had raised objections to it. Therefore, the programme, for the time being, will kick off in Khyber Pakhtunkhwa and Balochistan only and will expand to the other parts of the country later,” he added.
He said it was the government’s endeavour to give relief to the consumers in petroleum products’ price under the head of the levy. He further said that the government would eliminate the ‘middle man’s role in order to control inflation.
Tarin revealed that Indians had hacked the FBR’s website recently. “They had done the same thing in 2019,” he said, and added, “Therefore, the department’s IT system is being updated.”