Hafeez enumerates achievements

Adviser to the Prime Minister on Finance Dr Abdul Hafeez Shaikh has said that economic indicators have shown significant improvement in last five months and are being acknowledged by international financial institutions.

Addressing a press conference along with Minister for Economic Affairs Hammad Azhar and Chairman FBR Shabbar Zaidi here on Tuesday, Shaikh said current account deficit reduced by 35 percent and has seen more improvement in the last five months. He said portfolio investment and Foreign Direct Investment (FDI) are also seeing an upward trajectory.

He said the World Bank's President during his visit to Pakistan appreciated the economic performance. He also indicated to further improve relations of the Bank with Pakistan.

The adviser on finance said Asian Development Bank, which is one of the biggest development partners of Pakistan, has increased its financing to Islamabad by $3 billion after witnessing the progress.

Dr Hafeez Shaikh said that the IMF team during its visit reviewed the economic performance and expressed satisfaction on not only meeting the targets but also surpassing these. Consequently, they recommended their board to release the $500 million tranche to Pakistan on immediate basis.

Dr Hafeez Shaikh said that world renowned rating agency Moody's has upgraded Pakistan's credit rating from negative to stable. He said that Bloomberg, IMF and World Bank have also appreciated the improvement in country's economy. He mentioned that during the past few months, country's debt has decreased which is a welcoming sign.

He said the whole world gets the knowledge that the economic reforms process in Pakistan is well on track and is being appreciated by international financial institutions. He said the portfolio investment has seen investment of around one billion dollars.

Shaikh said the trust of the domestic investors has also increased on economic policies of the government. He said the reserves of State Bank of Pakistan are also seeing increase. He said revenue collection increased by 16 percent in last five months.

He expressed optimism that non-revenue target of Rs 1.2 trillion will be achieved. He said electricity and gas are being subsidized by the government to increase business and exports of the country.

He said that the government's expenditures are being controlled as part of measures for economic uplift. He said the reserves of the State Bank not only increased in the past few years but they also remained stable. He said Pakistan will move towards recovery and growth in the future.

The adviser said the economic challenges have not ended and efforts will continue to boost country's economy. Sheikh said a 100% increase in Pakistan's non-tax revenue has been witnessed due to policies of the government.

He said the government has decided to give Rs 300 billion to business community at subsidized rates as loans to spur economic activities. He pointed out that the government is working to reduce the interest rate for loans to investors. He said the government plans to boost the construction sector for economic development.

Responding to questions, the advisor said price of petrol was not increased in four months out of last five months.

He said the government is providing subsidy to seventy five percent of electricity consumers.

The adviser said tax refunds worth Rs 30 billion were disbursed among businessmen in cash form.

Minister for Economic Affairs Hammad Azhar speaking on the occasion said bringing Pakistan out of economic crisis was a big challenge but "now we are moving towards stability." He said FBR's revenue growth has witnessed a 17 percent increase.

Responding to a question regarding refunds, Chairman FBR Shabbar Zaidi said refund system has been made automated and no human has any role in it. He said FBR is working to address issues regarding submission forms of export refunds.

The FBR chief mentioned that the government received tax refund claims of Rs 25 billion while refunds worth Rs 5 billion were made in just 72 hours. He said despite decline in country's exports by 5.5 billion dollars, the revenue increased. He said FBR is working to address issues regarding submission forms of export refunds.

Chairman Federal Board of Revenue (FBR) Shabbar Zaidi said that there are only 325 companies which are contributing 85 percent of the revenue collection.

Responding to a query at the press conference on Tuesday, FBR Chairman said that the number of return filers went up by 50 percent but their contribution into revenues was not in line with number of increased returns. On issue of refunds, he said that the FBR released Rs 5 billion for sales tax refunds of textile sector and Rs 16 billion refunds were in process because the form-H was not submitted by taxpayers as they purchased inputs but not consumed so far.

He said that there were some technical hitches and they were constantly in touch with business community to resolve their problems.