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Tax exemptions no more: WB to provide $10.2b under CPS 2015-19: Dar

Tax exemptions no more: WB to provide $10.2b under CPS 2015-19: Dar

ISLAMABAD: Finance Minister Ishaq Dar has said that the World Bank (WB) will give Pakistan $10.2 billion during the next five years under Country Partnership Strategy (CPS) 2015-19. He also reiterated the government’s commitment to do away with tax exemptions in the next budget.

Dar made the assurance during a meeting with World Bank Group Managing Director (MD) Sri Mulyani Indrawati. The minister informed the WB’s top functionary that changes were being contemplated in the relevant tax laws to permanently eliminate the discretion of the Federal Board of Revenue (FBR) to issue special tax exemptions.

He argued that these measures would lead to increase revenue generation, enabling Pakistan to spend more on development programmes. “The privatisation strategy is in place to provide a holistic framework for disinvesting public sector assets.”

The minister said that good governance, transparency and zero tolerance for corruption remained the hallmark of the government in pursing the strategic partnership with the private sector in PSEs (public sector enterprises).

The minister highlighted that macro-economic situation was improving as reforms were making progress, growth was picking up and inflation was in single digits. Ishaq Dar informed the World Bank official about the steps taken to put the country’s economy back on track. He said the new government was pursuing a three-point priority agenda, focused on addressing the economy, energy and extremism.

The minister thanked the official for her personal interest in Pakistan-related programmes viz CASA-1000 and the Dasu hydropower projects which are in the process of approval by the Board and clearance of two DPCs on March 19 by the operations committee which the MD herself chaired.

The WB official while appreciating Pakistan’s economic policies said that the World Bank will help Pakistan in poverty alleviation and promoting shared prosperity for the people of Pakistan.

She said Pakistan has an encouraging macro-economic framework and this will lead to enhanced confidence in Pakistan by the international community and institutions. She also appreciated increased allocation for social safety network programmes.

She also informed the finance minister that the World Bank will be considering the Country Partnership Strategy (2014-19) for Pakistan on May 1, which reflects the WB’s commitment to the country. She underlined that participation of the private sector in energy sector reforms will be a strong message to the foreign investors and one success in this regard will lead to another success. She hoped success for Pakistan in launching of Eurobonds in the international market and auction of spectrum licences.

Meanwhile, Economic Affairs Division Secretary Nargis Sethi in a briefing told Finance Minister Ishaq Dar that the World Bank is going to allocate the share of $10.2 billion for Pakistan under Country Partnership Strategy (2015-19).

She said the financial envelop for Pakistan, which was around $9 billion in the previous Country Strategy Partnership 2010-14, has now been proposed to be considerably enhanced to $10.2 billion, a senior official told ‘The News’.

Dar was told that the World Bank Group (WBG) was preparing a new strategy for Pakistan, which will guide the engagement of its three institutions (World Bank, International Finance Corporation, Multilateral International Guarantee Agency) for the next five years and will be designed to focus on the twin goals of ending extreme poverty and promoting shared prosperity.

Sethi said that during the consultations process over 30 meetings, the WBG team met more than 400 individuals from civil society organisations, media representatives, parliamentarians, political leaders, chief ministers and cabinet members, civil servants, academics, think tanks, youth groups, the private sector, and other local and international development partners.

He expressed satisfaction over the cooperation of the WBG and its affiliation. Dar said tackling the energy crisis with low-cost generation options like hydro-power and improving access to community-led small-scale off-grid and renewable energy sources for remote areas of Balochistan and Fata remained on the government’s priority.