A shocking disclosure was made before the Senate Standing Committee on Finance on Tuesday when it was informed that the governments has taken $1 billion in loan from international financial institutions to provide cash grants to the poor under the Benazir Income Support Programme.
Saleem Mandviwala chaired the committee meeting. The BISP officials informed the members that the PPP government had signed loan agreements with the World Bank for $60 million in 2009 and $210 million in 2011. The loan was to be provided till 2016.
The PML-N government signed a loan agreement with Asian Development Bank in 2013 for $430 million. Only British DFID gave a grant of $446 million. So far $ 429 million have been disbursed while $657 million still are in the pipeline.
The committee members expressed shock over the revelation. They wanted to know the reason why loans were necessary for cash grants. Officials of the Finance Ministry were absent from the meeting so no answer could be furnished.
Earlier a team of economists led by former adviser finance, Dr Salman Shah briefed the committee on the tax scenario in the country. They said that the tax system and tax machinery has collapsed in the country. Nobody trusts the FBR, people are not ready to pay taxes. Instead of increasing tax base FBR is burdening the existing tax payers, they added.
Salman Shah recommended that the parliamentarian should take lead to reform the tax system. He proposed insulating FBR from political system, inducting professionals, adopting modern IT systems. He said the IMF and Finance Ministry’s diktat for enhancing revenue collection every quarter has driven FBR to shambles. The institution has lost its track to enhance tax base. The committee decided to look into their proposals for future plan of action.
