ISLAMABAD: Finance Minister Shaukat Tarin said he would sack Governor State Bank of Pakistan (SBP) Reza Baqir if he failed to deliver and extend cooperation with government to achieve economic goals.
Finance Minister stated this in a briefing to media persons in Islamabad. Tarin said, “The Parliament is supreme and has complete authority to make any amendment in the law.”
Minister for Finance Shaukat Tarin was optimistic that there would be no need for taking any extreme action against Governor SBP.
He said the federal government would appoint eight members of SBP’s Executive Board — which would be responsible to devise the affairs of the central bank.
He said that the government wanted to make SBP as an autonomous body having full independence to function for devising monetary and exchange rate policies. Tarin said that granting autonomy to the SBP was the demand of the IMF but it was also the manifesto of PTI for providing independence to all state institutions. He dispelled the impression that the SBP would go out of control of the government as the Governor SBP would be appointed by the government and out of 10 members of the Board of Directors, eight members would be selected by the government.
The minister was of the view that the mini-budget known as the Tax Laws Supplementary Bill would not create difficulties for the common people of Pakistan as most of the sectors where the GST exemptions were withdrawn, would be provided refunds and input adjustments. He siad the mini-budget would ensure documentation of the economy by removing distortions in the tax system.
He said that the IMF had demanded tax measures of Rs 700 billion but they convinced the IMF to restrict taxation measures to just RS 343 billion. Out of Rs 343 billion taxation measures taken through Tax Law Supplementary Bill, the taxation measures of Rs 280 billion were taken in the shape of input adjustments and refundable and this whole exercise was aimed at documentation of the economy.
There are only Rs71 billion in taxes imposed on luxury goods, he said and added that the government also allocated Rs 33 billion for the provision of subsidy. He said that the government could not backtrack from documenting the economy. He said that the government protected fertiliser, pesticides, tractors, agriculture equipment and provident income from slapping a tax on the IMF demand.
On the SBP’s autonomy, he said that the governments in the past obtained Rs6,000 billion from the central bank having zero interest rate.
Energy Minister Hammad Azhar said that the government was presenting average gas tariff bill in the Parliament next week.
Azhar said that the existing slabs would remain intact and no change is being incorporate in these slabs. With this change in average tariff, the gas prices are expected to surge 30%.
Hammad Azhar said, “There will be no upward adjustment in gas tariff in one go.” Energy Minister also said that the country possessed gas reservoirs for 10 years and just a 30% system was being run on LNG.
He said, “After two to three years, the situation will become more difficult.” He said there is a need to devise a strategy as early as possible so the road map would be finalised to tackle the arising situation.