Finance ministry disputes World Bank report about external financing gap estimated at $31b

  • World bank report was based on the misinterpretation of the standard definition of the gross financing needs of the country: Finance secretary
Pakistan

ISLAMABAD – The ministry of finance operating under Ishaq Dar has clarified that the recently released report by the World Bank suggesting that Pakistan needed $31 billion to meet foreign financial obligations was not based on facts.

During a high-level meeting chaired by Finance Minister Senator Ishaq Dar on Sunday to review matters related to the Federal Board of Revenue (FBR) and the Finance Division, the acting Finance Secretary Shahid Mehmood claimed that the report was based on the misinterpretation of the standard definition of the gross financing needs of the country.

“Pakistan’s actual gross financing need for FY 2017-18 was estimated at $18 billion (5.3% of GDP) rather than $31 billion (9 percent of GDP),” he said and added that the error was conveyed to the World Bank for rectification.

The finance minister directed the Finance Division to proactively work with the World Bank to ensure correct reporting of economic data. He also directed to ensure timely and effective implementation of the various ongoing initiatives of the ministry.

Dar was informed that external inflows were expected to be sufficient to meet repayment obligations and in the first two months of the current financial year, exports and remittances had improved.

The FBR Chairman, Tariq Mahmood Pasha, briefed Ishaq Dar on the progress in taxpayer’s outreach programme launched by the Bureau on the minister’s instructions for broadening the tax base.

“Senior officers of the FBR were holding workshops on e-filing of returns for members of tax bars, professional bodies and chambers of commerce and industry,” Pasha said.

The FBR chief maintained that help desks had been established in tax offices throughout the country, besides FBR’s helpline to facilitate return filing.

Highlighting the results of revamped tax collection system, the official observed that FBR’s efforts were yielding results as up to October 13, more than 352,000 returns had been received as against 162,000 up to the same date last year.

The minister was further informed that specialized Broadening of Tax Base (BTB) zones would become fully operational from November 1 this year.

After the comprehensive briefing, Ishaq Dar expressed his satisfaction on the progress made by the FBR and stated that the last date for filing of returns was extended to October 31 on the genuine demand of tax professionals and trade organisations.

“Given the facilitation which had been extended to trade bodies and taxpayers, the FBR should now work closely with representative bodies to ensure that returns due for the current year were filed by the announced date,” he added.