Ishaq Dar dismissed reports of the government planning to impose new taxes on agriculture, construction, and real estate sectors to fulfill the IMF’s conditions
ISLAMABAD: Finance Minister Ishaq Dar firmly refuted rumors on Friday, denying any plans by the government to impose fresh taxes on the agriculture, construction, and real estate sectors to meet the IMF’s conditions.
Addressing the Speaker and members of the House as witnesses, Dar assured them unequivocally that no new taxes would burden the agriculture, construction, or real estate industries. He emphasized that the government had already taken the necessary difficult decisions and endured significant challenges. During his budget speech in the National Assembly last month, he had disclosed all the fiscal measures essential for meeting the IMF’s conditions.
“We have diligently fulfilled all prior conditions and announced the required fiscal measures. I want to reaffirm that no new taxes will be imposed on these sectors,” Dar confidently stated.
Dar highlighted the government’s strenuous efforts, aiming to quell the storm of inflation and price hikes through its fiscal measures. He expressed his willingness to provide comprehensive information to anyone seeking clarification on these specific issues.
Confidently, the minister disclosed information from State Bank of Pakistan (SBP) sources, indicating a significant improvement in inflation. From its previous peak of 38 percent, inflation had already been reduced to 29 percent and is projected to further decline to a mere seven percent within the next two years.
Furthermore, he presented three documents related to the stand-by-agreement reached with the IMF before the House.
Proudly attributing the country’s economic recovery to the government’s efforts, Dar mentioned that Pakistan had successfully reached a $3 billion agreement with the IMF, holding the former PTI government responsible for the economic hardships due to their backtracking on commitments.
With this achievement, the State Bank of Pakistan received the first tranche of $1.2 billion, effectively stabilizing the economy. The finance minister informed the House that the current foreign exchange reserves had reached their highest position since October 2022.
As of now, the total liquid foreign reserves stand at US$14,065.3 million, with the central bank holding $8,727.2 million, thanks to inflows from Saudi Arabia, the United Arab Emirates (UAE), and the IMF. Among these contributions, the central bank received $2.0 billion from Saudi Arabia, $1.2 billion from the IMF, and $1.0 billion from the UAE, resulting in net foreign reserves held by commercial banks totaling US$5,338.1 million.
Reassuring the public, the finance minister emphasized that the government had fulfilled all due payments in line with international agreements, demonstrating their commitment to meeting obligations on time. He confidently stated, “We have already made it clear that we have the reserves to make international payments for the month of May and June 30.”
Dar announced that the IMF agreement would be accessible on the finance ministry website, ensuring public access to information.
Minister for Aviation, Khawaja Saad Rafique, speaking on the House floor, stated that the government would proceed with outsourcing three major international airports, beginning with the Islamabad International Airport, for a duration of 15 years to improve operational activities. In response to a calling attention notice from Maulana Abdul Akbar Chitrali of Jamaat-e-Islami (JI) regarding the airport outsourcing, the minister emphasized that no pressure or blackmail would be tolerated during this process, which also includes restructuring the Pakistan International Airlines (PIA).
Saad clarified that outsourcing the airports did not imply privatization; rather, it aimed to bring in proficient operators to enhance airport operations in line with global standards. He assured an open competitive bidding process to select the best bidder to operate the airport, emphasizing that the approach would be profit-oriented and ultimately benefit the national exchequer.
To facilitate the bidding process, the International Finance Corporation would serve as the consultant, with 12-13 companies already expressing interest in participating. The minister further guaranteed a transparent process that strictly adheres to all rules and regulations. However, he clarified that the outsourcing process would not include the runway and navigation operations.
Saad highlighted the successful examples of outsourced airports in countries like India and Turkiye, mentioning how even Madina Airport had efficiently delivered enhanced services through outsourcing.
Addressing the substantial deficit of PIA, which had reached Rs80 billion this year and was projected to escalate to Rs259 billion by 2030 if left unaddressed, the minister stressed the necessity of restructuring the airline. He assured that no employees would face layoffs, and all existing staff would retain their job security and privileges. Nevertheless, he emphasized the implementation of best practices to ensure efficient management of airport facilities.
Regarding future plans for PIA, Saad informed the House that the airline’s total liability amounted to Rs742 billion, with only 27-28 planes currently operational. He shared the plan to restore flights to the UK within three months, followed by resumption of flights to the US and Europe.
The minister cautioned that without immediate reforms, PIA’s operations would have to halt within the next one and a half years, citing a statement from the former federal minister for aviation that had caused problems and resulted in a loss of Rs70 billion for the airline.
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