IMF Deal Will Help Boost Tax Collection in FY22: Finance Advisor

Advisor to PM on Finance Shaukat Tarin has claimed that IT exports have immense potential in Pakistan which could be a game-changer for Pakistan’s exports and its economy ultimately,

Speaking as the chief guest at the 18th Annual Excellence Awards of CFA Society at a local hotel in Karachi, he remarked that IT will change the scenario of exports and the economy as well.

Pakistan’s exports of goods will increase to $32 billion in the current financial year as compared to over $24 billion reported in the last financial year. Further, the exports of services will swell to over $7.5 billion which will push the overall figure to $40 billion this year, and it is expected that exports of goods and services will surge to nearly $55 billion in the very next financial year.

The over-reliance on the IT exports of the government is surprising because the targets of the first quarter have not been reached. The exports stood at $635 million against a target of $900 million. The Advisor even quoted a 50% increase in the growth of IT exports, which is not the case. In fact, IT exports recorded 42% growth year-on-year in the first quarter of the financial year 2021-22.

Stakeholders of the IT industry were of the view the government’s department has not yet fulfilled the commitment that was planned as a stimulus package to IT exporters, hence the exports value remains less than $300 million per month.

They were of the view that IT exports should touch $3 billion at least by the end of the current financial year provided the government could ensure the implementation of the plan which it decided on with the stakeholders of the sector.

Advisor to PM, on the occasion, further stated that the government’s relief package is the first-ever in Pakistan that aims to provide relief to 130 million people directly.

Government’s Roadmap for Economic Growth

The International Monetary Fund’s (IMF) loan program worth $6 billion would support Pakistan to achieve 5% economic growth and collect revenue of over Rs. 6 trillion in taxes in the current fiscal year 2022.

The revenue collection is impressive so far as we can see over 30% growth in income tax, hence the collection of taxes could touch Rs. 6 trillion this year, he claimed. The country’s exports would be equivalent to 70-80% of imports over the next three to four years, he said.