Economic hardships to persist till September: Miftah Ismail

KARACHI: Finance Minister Miftah Ismail said Saturday that Pakistan’s economic hardships would continue till September but expressed hope of reviving the economy after obtaining loans from global institutions and friendly countries.

In a press conference after meeting the Karachi Chamber of Commerce and Industry (KCCI), the finance minister said that the coalition government had taken tough decisions — cutting subsidies and broadening the tax base — after coming into power — and apologised to the businessmen for it. “We will face difficulties till September. You will have to pay your share of tax no matter what and I apologise for the difficulties everyone is facing, but my primary objective is to save the country from default,” Miftah said.

The finance minister said that economy is moving in the right direction due to the “prudent policies” of the government and steps that are being taken to stabilise it.

Moving on to the ban on the import of luxury items, the finance minister said it would continue till next month as it was in the best interest of Pakistan’s economy. However, the government last week lifted the ban on the import of non-essential and luxury products imposed earlier in May. But the restrictions on the import of completely built-up automobiles, mobile phones, and home appliances did not end.

Miftah Ismail said Pakistan could not be able to pay $450 million till to date and it became very difficult for us to seek more loans and felt shame in asking more debts. He said that the world thought that how they were running their country as they asked someone to make phone call for loan and then sometime to other for same purpose. He said that we have to reduce current account deficit.

Miftah Ismail on Saturday dismissed the notion that the government or central bank brought down the value of dollar against rupee, and said it was purely “demand and supply” which determined market price.

Miftah gave the statement in response to Karachi Chamber of Commerce and Industry (KCCI) President Muhammad Idris, who had congratulated the minister on reducing the price of dollar.

Addressing the members of KCCI, the minister said that neither the government nor the State Bank of Pakistan (SBP) intervened in the market directly; however, he admitted that “measures were taken to stabilise the economy”.

He said that the country was saved from default and vowed to continue with some tough decisions. “I would request the business community to endure some hardships till next month September,” Miftah urged the KCCI members.

The finance minister also reassured the KCCI members that payments on letters of credit opened earlier had neither been stopped by the government nor was there a plan to stop in the future. He said that some measures had to be taken to curtail the imports as Pakistan’s import bill surged to $80 billion and exports were just $31 billion in the last fiscal, resulting in a massive trade gap of $49 billion. The government could not let it slide that imports were so massive, while our exports were growing at a snail’s pace.

About the withdrawal of subsidies on petroleum products and power, he said it was needed in order to bring Pakistan’s economy on the right track. He declared that the risk of Pakistan’s default had evaporated due to tough decisions such as an increase in energy prices and curtailment of imports, which slashed the demand for foreign exchange. Miftah said that unfortunately industrial growth could not grow at a pace, which was required. He said that the production of electricity doubled from 13,000MGW to 25,000MGW in 2013-2018, but industrial production did not grow enough to consume this energy and increase the exports of the country.

Meanwhile, a delegation of business leaders of Karachi facilitated by the Muttahida Qaumi Movement Pakistan leaders met Finance Minister Miftah Ismail at the State Bank of Pakistan and had successful negotiations.

On this occasion, the MQM-P Deputy Convener and former Karachi Mayor Wasim Akhtar, Federal Minister of Ports and Shipping Faisal Sabzwari, and MQM-P Coordination Committee Khalid Sultan were also present. While the businessmen included Sharjeel Gopalani, Jameel Paracha, Rizwan Irfan, Muhammad Ahmed Shamsi, Waqas Azim, Salim Memon, and Amin Memon.

Suggestions and complaints were presented to Finance Minister Miftah Ismail, in which Sharjeel Gopalani called for the immediate removal of unfair fixed sales tax in bills and the need to remove the condition of I-Form in imports and to provide foreign exchange to banks for immediate clearing of imported goods.

Mohammad Ahmed Shamsi requested that instead of targeting only traders, all types of income tax should be imposed and forced tax should be abolished from electricity bills.

However, the Federal Finance Minister Miftah Ismail assured to address all the grievances of the traders and remove the controversial fixed sales tax retailers from electricity bills immediately. He said that electricity bills would be sent without sale tax for three months and after that, a meeting will be held with the businessmen to bring new taxpayers into the tax net and change the taxes.