IMF’s remaining one prior condition will be met tomorrow: Miftah

Says import ban on cars, mobiles, home appliances to stay; SBP governor appointment expected this week; hopes rupee will perform better in next two weeks

Web Desk

Updated 31 Jul, 2022

Business & Economy

Finance Minister Miftah Ismail addresses a press conference on the economic situation in Islamabad. PID

Pakistan would meet one remaining prior condition of the International Monetary Fund for the bailout package tomorrow (Monday), Finance Minister Miftah Ismail said, without mentioning the requirement.

“It will be fulfilled tomorrow,” he said while addressing a press conference in Islamabad on Sunday that was focused on the economy and the decision to lift the ban on luxury items imported. He was accompanied by Coordinator to the PM on Economy and Energy Bilal Kayani.

He grinned while saying this in response to a question. The government was expected to increase oil price from Monday. Source told Aaj News that the government is expected to increase the petrol products price by Rs17 from August 1 (tomorrow), with the increase in the oil prices in the international market.

The finance czar continued to blame the preceding PTI government for the economic woes and blamed former minister Shaukat Tarin’s policies.

He said that around $3.8 billion worth of petroleum products were imported in June and $5 million worth of imports were made this month (July). Miftah said that the government planned to bring the imports down to $60 billion a year from $80 billion made by former PM Imran Khan last year.

The government also planned to lessen the current account deficit, which swelled over $17 billion, he added.

Hopefully next two weeks will be better for the rupee

Miftah expressed hope that the next two weeks would be better for the rupee, which has fallen to a historic low in the recent past amid political uncertainty, as the government has curtailed imports.

“You are right that after the August 17 polls, the dollar has gotten out of control and appreciated,” he said in response to a query on the rupee depreciation after April 11 when a day earlier former prime minister Imran Khan was ousted through a vote of no-confidence in Parliament.

“I truly believe, even though I won’t speculate on the currency market, I think that the true value of the rupee is far greater than this.”

He added that the government had to make payments worth billions stated in June and July which had caused the local currency to come under pressure.

He reiterated his hope. But added that speculations and sentiments play role in the stock market and he only had fundamentals.

Additional 5% tax on manufacturing companies failing to make 10% exports

The finance czar announced that the government would impose an additional 5% tax on manufacturing companies, excluding firms that cannot export, which are unable to make 10% of exports in order to boost the sector.

“I will ask the PM to apply this tax from next year as I am giving this year to them,” he said after explaining the tax amount to be applicable to shop owners.

Rs10,000 tax from shop having monthly bill of Rs100,000
Rs120,000 tax from shop having monthly bill of Rs1,200,000

“There will be difficult times and we have to face them,” he said, reiterating the super tax imposed on big companies on June 24.

“We will try to waive off tax on shops using 100 to 150 units of electricity,” he said and urged such owners to pay Rs36,000 of annual tax (including sales and income) in the electricity bill and get registered on the active taxpayer list.

SBP governor appointment

The federal government would this week appoint the State Bank of Pakistan governor, a post which fell vacant after the departure of Raza Baqir. SBP Deputy Governor Syed Murtaza was acting as the central bank governor as per the rules.

“I hope and I believe that the SBP governor will be appointed this week and hopefully my recommendation will be part of it,” he said.

He further shared that the government planned to have executive allowance in all government departments.

Import ban on cars, mobiles, home appliances to stay

The federal government was planning to lift the import ban on luxury items, however, it would still be applicable to vehicles, mobiles, and home appliances, he announced.

“The Economic Coordination Committee has taken this decision,” he said, “Prime Minister Shehbaz Sharif will take the final decision. The import ban would be lifted in phases.”

The ruling coalition government on May 19 imposed a ban on the import of 38 non-essential luxury items under an “emergency economic plan”. “These items are those which are not in the use by the general public,” Information Minister Marriyum Aurangzeb said while addressing a press conference.

Miftah added that there would no embargo on the items assembled in Pakistan.

List of banned items as decided by the government on May 19