Macroeconomic stability will soon be achieved, according to Finance Minister Miftah Ismail, as all requirements for the International Monetary Fund (IMF) program to resume by the end of the month have been satisfied.
According to a news statement from the Pakistan Stock Exchange on Tuesday, he made the comments while speaking with officials from the government, the stock exchange, and businessmen.
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 Group Chairman Aqeel Karim Dhedhi, Bank Alfalah Limited CEO Atif Bajwa, NBP Funds CEO Dr Amjad Waheed, Arif Habib Corporation Director Nasim Beg, and Pakistan Business Council CEO Ehsan Malik participated in the meeting.
The discussion covered Pakistan’s macroeconomic stability, capital markets, taxation, and non-tax initiatives, according to the press release.
Ismail stated that the nation’s balance of payments situation was “fully under control” and that due to increasing hydel electricity, decreased energy demand, and lower oil prices, it may even have a surplus in the upcoming months.
All increased expenses will be entirely financed by tax measures, and fiscal discipline will be strictly observed. As new sources of income are generated, 10% super tax will only be in effect for one year, he added.
Additionally, he reiterated that the tax on banks that is connected to advances-to-deposits ratios will not be applied retroactively and that tax revenues from the retail sector are anticipated to increase significantly from the previous year.
The minister also established three committees, of which the first would inform the Monetary Policy Committee of the SBP of the private sector’s position on interest rates, the second would coordinate with the Pakistan Business Council and the PSX on all tax matters, and the third would examine the listing of development finance institutions (DFIs), debt and Sukuk issuance, reform of the National Savings Scheme, and investigate the creation of a market for exchange rate forward derivates.
Ismail committed to review the progress and meet the stakeholders again in two weeks, the press release stated.
For his part, PSX MD Khan told the finance minister the situation in the capital markets needed to be addressed on a “war footing”. He noted that while state-owned enterprises (SOEs) were “extremely profitable, their payout ratio is a meagre 18pc”. The participants asked that the payout ratio be raised to 50pc.
Ismail then directed the relevant ministry to immediately hold a meeting with stakeholders to discuss the matter.
Participants in the discussion claimed that while unincorporated businesses paid far less in taxes, listed companies’ income was subject to double taxation. They also expressed worries regarding the capital gains tax (CGT).
“All of the points raised were well received by the finance minister. He specifically requested that the FBR evaluate any discrepancies in the CGT system and the tax credit issue for newly listed companies very away. He requested that SECP review the Sahulat Accounts’ investment limit and AML (anti-money laundering) rules, according to a news statement