Pakistan on path of economic recovery: IMF

Pakistan’s economic growth has started to recover despite security and energy challenges and the country met almost all targets under the International Monetary Fund program, the global financial institution said on Tuesday.

“Pakistan’s program is progressing well,” the Fund said in a statement following ‘constructive discussions’ with Pakistani officials focusing on Pakistan’s recent economic performance, the outlook for the rest of the fiscal year.

Adnan Mazarei, who met with the Pakistani officials in Dubai over the past week to initiate discussions on the fourth review under Pakistan’s Stand-By Arrangement (SBA), noted that Islamabad observed all quantitative performance criteria, except for the budget deficit target, which exceeded by a small margin.

Listing positive trends Pakistan registered in recent months, the Fund said the exchange rate has remained stable at Rs 84–85 per US dollar, and the international reserves position has strengthened (the banking system’s gross foreign exchange reserves, including the State Bank and commercial banks, reached $14.3 billion in mid-February, of this total, the State Bank held $10.5 billion).

The early signs of recovery in some sectors and the improved external position are encouraging, although there are risks and challenges to Pakistan’s economic program.

“Economic growth in Pakistan is starting to recover; large-scale manufacturing output has started to increase, the improvement in the global economy has helped manufacturing exports, and private sector credit growth has picked up to some extent as businesses rebuild their working capital.

The IMF’s package for Pakistan - approved in November 2008- has been extended to $11.3 billion. Looking ahead, the IMF statement said, a resumption of higher growth is needed to raise living standards and will require improvements in the business climate to stimulate higher investment by local and foreign investors.

Emphasizing the need for stepped up donors support for the key anti-terror partner of the international community, the Fund said, early disbursement of donor financing remains crucial to support Pakistan’s stabilisation and reform efforts as well as laying the basis for a sustainable growth.

The IMF mission staff will prepare a report on the fourth review under Pakistan’s SBA, which is scheduled for consideration by the IMF Executive Board in late March.

Annual General Meeting of Pak German Business Forum

The annual general meeting of the Pakistan German Business Forum (PGBF) was held with the agenda of holding the election for a new Board. An announcement here said that the outgoing President, Salahud Din Ahmed, presented the annual report and welcomed the old and new members.

It said that the elections conducted under the supervision of Syed Khurshid Pervez in a very peaceful atmosphere.

The new board consists of Saifuddin Zumkawala of M/s. Allanz EFU insurance, Qazi Sajid Ali of BASF, Masud Akhtar of KSB Pumps, Abdul Baqay Khan of Merck Pakistan, Syed Nadeem Ali Kazmi of Siemens Pakistan, Razzak H.M. Bengali of Baluchistan Wheels Limited, Dr. Islam Hamid of Delta Pharma, Wasim Mirza of Pakistan Specialty Chemicals, Noordin Karim of Shermah Enterprises, Salahud Din Ahmed of Universal Business Equipment, Mian Abrar Ahmed of Cuckoo Industries and Khawaja Jahanzeb of Zeb Travels.

After the election proceedings, the newly elected Board members unanimously elected Saifuddin Zumkawala and Razak Bangali, as President and Vice President respectively.

Saifuddin Zumkawala thanked all the members for their confidence reposed in him and stated that he will try his level best to promote the affairs and aims/objectives more vividly of PGBF amongst in the country and internationally as well.

Federal Board of Revenue identifies 0.5 Million tax evaders

The task force of the Federal Board of Revenue (FBR) on broadening the tax base has identified 0.5 million rich people, who are not ready to come into the tax net. Sources stated that FBR and National and Database Registration Authority (Nadra) are jointly working on actual number of rich people earning huge income, but still out of the tax net. In this regard, the FBR and Nadra officials have convened meetings in recent past to identify such non-filers of income tax returns in all posh areas of Karachi, Lahore, Islamabad and other cities.

Based on risk-profiling of the taxpayers, the Nadra informed the FBR that approximately 0.5 million potential individuals, belonging to elite class, have not obtained the National Tax Numbers (NTNs). The risk-based profiling of un-registered rich individuals has been jointly done by the FBR and the Nadra. The FBR updated database has shown that out of 2.5 million NTN holders there are more than 1.8 million who are not filing income tax returns. Only 0.7 million are actually filing their due income tax returns. The FBR’s task force on broadening the tax base has decided that initially 150,000 (about 5 percent of the 1.8 million including abovementioned 0.5 million) individuals may be sent letters to file returns or explain why they did not file tax returns. These non-filers would be picked randomly through the computerised system to avoid discrimination.

The selection process would be done under the relevant provisions of the Income Tax Ordinance 2001 with the help of data particularly addresses provided by the Nadra. To ensure credibility of FBR, these letters may be prepared by one person and checked by another FBR official before such intimations are issued to the non-filers. This verification process would ensure transparency during the whole exercise. Taking another major initiative, FBR’s task force has also decided that thorough scrutiny of 150 most potential people would be done at the FBR level. The detailed data analysis of their profiles would be done to check their business trends using third party data. Senior officials of the FBR would be involved during this exercise to ensure that those potential taxpayers are selected, who have a high likelihood of being tax evaders. The analysis of 150 big tax evaders would also help to identify similar nature of cases within the same sectors.