ISLAMABAD: The government’s new economic team faces an uphill task to revive the economy, reform the tax system and save the International Monetary Fund (IMF) standby arrangement that has been jeopardised by the non-implementation of the IMF conditions, particularly the imposition of the reformed general sales tax.
“It’s a big challenge,” Dr Waqar Masud Khan said while talking to Pakistan Today on Tuesday. He said he had started reviewing the situation and would soon be able to come up with a strategy to put the things on the right track. Dr Khan will lead the new team as the finance secretary, while former finance secretary Salman Siddique will head the Federal Board of Revenue (FBR) and his predecessor Sohail Ahmed will take care of the Planning Division.
The immediate task before the new economic team is to revive the fiscal discipline, as the fiscal deficit is already estimated to rise to 4.7 percent of the GDP, as compared to the budgetary estimate of four percent of the GDP. The rising inflation also requires immediate attention, as well as the government borrowing from the State Bank of Pakistan.
The government plans to keep in touch with opposition parties to convince them on the GST. The finalisation of the provincial drafts on GST on services will play an important role in the smooth passage of the bills from the assemblies.
They said revenue collection was a major area of concern and the economic team would have to pacify the reservations of customs officers on the proposed Inland Revenue Service.
But curtailing the rising power tariff differential subsidy would be a gigantic task. The inefficiency of generation and distribution companies is a major hurdle in settling the issue. The delay in the notifying of new board of directors of generation, distribution and transmission companies is hindering the provision of the already committed financing by international financial institutions.
With a masters degree in Political Economy and PhD in Economics from Boston University and MA Economics and LLB from Karachi University, Dr Khan has earlier served as the director general of the Board of Investment, chief economist, senior vice president of Bankers Equity Limited, additional secretary at the Prime Minister’s Secretariat, vice president of International Islamic University, Islamabad, additional secretary Finance Division, as well as the secretary at the Economics Affairs Division.
