Tax-to-GDP ratio to be enhanced to 15 percent in five years: Prime Minister tells IMF head of mission

Prime Minister Yousuf Raza Gilani has said that tax-to-GDP ratio would be enhanced to 15 percent in the next five years. Talking to the head of mission of International Monetary Fund (IMF), Adnan Mazarei, and Resident Representative in Pakistan Paul Ross, the Prime Minister said the tax-to-GDP ratio had been increased from 8.8 percent to 10.6 percent in one year.
He expressed his government's firm commitment to enhance the ratio to the level of 15 percent in the next five years by broadening the tax base. He further said that due to stringent fiscal measures, the government has successfully brought down the fiscal deficit from 7.6 percent to 5.2 percent, while the foreign exchange reserves improved to the level of $14.3 billion.
The Prime Minister was upbeat as all economic indicators have started showing positive trend due to government's timely intervention and introduction of corrective measures. He said economic wellbeing of the people through infrastructure development and increasing economic opportunities are some of the priority areas which the government is focusing on to achieve these objectives.
While appreciating the IMF for its help in substantiating government's efforts in overcoming the economic challenges made tough by global recession and providing additional $2.4 billion, the Prime Minister told Mazarei about government's approach to address problems like poverty, energy shortage, limited access to public services, and extremism through a combination of administrative, political and security measures. He underlined that economic development is a vitally important component of the long-term government vision.
The Prime Minister said that steps have been taken to implement macro-economic reforms such as phased removal of subsidies on petroleum and power prices, tightening of monetary policy, increasing revenue and controlling expenditure while reducing borrowing from the state bank. He said the government has also taken steps to improve the power situation in the country by installing new power plants as well as tapping alternative energy sources besides encouraging conservation of energy.
Adnan Mazarei appreciated that GOP had taken difficult decisions in difficult times. He said that the Fund Board had fully acknowledged the achievements of GOP in enhancing tax to GDP ratio, reducing inflation and improving the overall economic situation by adopting right economic policies. The meeting was attended by Shaukat Tarin, Finance Minister, Hina Rabbani Khar, Special Secretary, Finance and Chairman, FBR.