ISLAMABAD: Finance Minister Ishaq Dar on Saturday said the government curtailed budget deficit to 2.3 per cent of GDP in the first half of this fiscal year, mainly because of improvement in non-tax revenue collection and squeeze on development spending.
However, he said the fiscal deficit target of 4.9pc for entire 2014-15 may be missed because of additional spending on National Action Plan (NAP).
Briefing media persons, the minister said that all other major economic indicators appeared positive during July-Dec period.
Announces that individuals will not need NTNs for filing tax returns from next fiscal year
The finance minister announced that National Tax Number (NTN) will not be mandatory for the taxpayers from the next fiscal year as they would be able to file tax returns using Computerised National Identity Card (CNIC) numbers from July 1.
However, he said citizens who didn’t have CNICs would continue to use NTNs to file tax returns. Companies and other entities will also need NTNs.
Replying to a question on his pledge to add 300,000 new taxpayers, the minister said notices had been issued to 150,000 people so far. However, he agreed to look into the issue for low tax compliance.
He said the Export Refinance Scheme has been reduced to 6pc from 7.5pc, to be effective from Feb 2. An amount of Rs213 billion has been disbursed under the scheme so far, he said.
Finance minister said that the Long Term Finance Facility would also be reduced from tomorrow to 7.5pc from 9pc.
Elaborating the performance of economic indicators, the finance minister said the Federal Board of Revenue has collected Rs1,162.4 billion during the first six months of the this fiscal year as against Rs1,031.4 billion a year earlier, showing a growth of 12.7pc.
The minister said he was satisfied with the revenue collection growth against the backdrop of “just 3pc growth in revenue collection under the last government”.
He said the revenue was collected as percentage of prices. “If the price of commodities is falling, the revenue collection will also fall,” the minister said.
The fall in export proceeds narrowed in July-Dec while the import bill grew by over 4pc, compared to the same period of last year, he said.
Remittances during the half rose by 15.26pc reaching $8.90bn as against $7.79bn last year.
He said the agriculture credit will reach Rs500bn in the current fiscal year. “The PML-N government gives importance to agriculture sector which constitutes more than 51pc of the economy.”
The minister said the development spending until January 2015 stood at Rs184.7bn. But this, he said, was not an unusual spending and would reach Rs500bn easily by end-June.
The country reserves edged up to $15.067bn.
Proposing an all parties’ conference on economy, he said: “We are going to place economic plan for three years on the floor of the National Assembly. We will welcome input from all parties.” He advised Pakistan Tehreek-i-Insaf Chairman Imran Khan to avoid doing politics on economy.
The minister said privatisation of the power sector was inevitable to improve bill collection and reduce line losses. “We are ready to offer power distribution companies to provinces as well.”
The minister said he advised the State Bank’s governor to release policy rate within half an hour of the meeting instead of the current practice of three hours’ delay.
The minister ruled out any condition by the International Monetary Fund regarding electricity tariff reduction. “Nepra is an independent authority. It will announce the decision in a day or two,” he said.
Published in Dawn, February 1st, 2015