The adviser to the Prime Minister for Finance and Revenue, Shaukat Tarin, has stressed the need to stabilize the exchange rate to overcome inflation.
“The instability in the exchange rate has increased inflation and the government is trying to reduce its burden on people from the low income group,” Tarin said, as quoted by Radio Pakistan, during an interview on the Samaa ‘television program. Nadeem Malik Live ‘on Tuesday.
He said the government needed to keep the exchange rate close to the “real effective exchange rate.” He said that the drop in the exchange rate had a big impact on inflation.
Track and trace system to expand the tax network
The financial advisor said that the Federal Revenue Board (FBR) track and trace system (TTS) will be implemented in various sectors to expand the tax network, adding that technology was being used for that purpose.
Prime Minister Imran Khan launched the TTS on Tuesday aimed at helping the government minimize tax evasion and crack down on illicit trade in different sectors.
In the first phase, TTS was implemented in the sugar industry to monitor the movement of sugar from factories in order to control tax evasion. The sugar industry has become the second sector after cigarettes to be incorporated into the electronic control system. The FBR plans to incorporate the beverage, cement, fertilizer, iron and oil sectors under this system.
In response to a question about an increase in the energy tariff, Tarin acknowledged that the International Monetary Fund (IMF) had required the government to change the tariff.
However, he said that any increase in electricity rates by the government would be less than what the IMF had demanded.
Responding to another question about tax collection targets, he said the assessment would be made on people’s real assets so that a real tax could be imposed on them.
The adviser said that the SBP’s net international reserves showed that equalization was occurring on a net basis. “He also shows that his foreign currency reserves are not shrinking,” he added.
He stressed that the government seeks to give a break to the urban middle class, which has been hit hard by inflation.
Pressure on the current account deficit
The financial advisor explained that the basic inflation rate in the country was still at 7.15 percent. He said pressure on the current account deficit was allowing people to “psychologically convert assets into dollars, so an increase in the discount rate can stop that process.”
Responding to a question about subsidies from Saudi Arabia, he said that there were some legal clauses in the KSA draft agreement, which the Law Ministry had examined and the matter had been practically resolved.
