ISLAMABAD: The News reported on Thursday that former President Asif Ali Zardari met with Prime Minister Shehbaz Sharif to talk about the country’s overall political and economic situation.
The president of the Pakistan Muslim League (PML-N) and the co-chair of the Pakistan Peoples Party (PPP) met in Prime Minister House Islamabad to plan for the revival of the economy and the aftermath of the politically difficult economic decisions that the PM is expected to make in an effort to restart the IMF’s stalled loan program.
The meeting also included Pakistan Peoples Party (PPP) Senator Saleem Mandviwala, Economic Affairs Minister Sardar Ayaz Sadiq, Railways Minister Khawaja Saad Rafique, and Finance Minister Senator Ishaq Dar.
The political situation in Punjab and Khyber Pakhtunkhwa following the formation of the caretaker governments was another topic of discussion among the two leaders. Their participants agreed that the coalition government should give priority to the economy’s revival.
According to sources, Finance Minister Ishaq Dar briefed the attendees on the economic situation and the consequences of difficult decisions. They also said that the participants decided to make sure there was a way to keep inflation under control.
The tough decisions
Imposition of a petroleum development levy, a market-determined dollar rate, and more are among the difficult decisions that must be made to revive the IMF program. Other difficult decisions include raising power and gas tariffs, improving tax collection, and more.
The rupee lost almost 1 percent against the dollar on Wednesday as the unofficial cap on the greenback was lifted.
According to a statement released by the Exchange Companies Association of Pakistan (ECAP), the rupee lost 2.25 or 0.92% against the dollar at the close, compared to a range of 237.75-240 at the close on Tuesday.
The gas price is also expected to rise from Rs650 per MMBTU to Rs1,100 per MMBTU, according to a report in The News.
The government intends to recover between Rs800 and Rs850 billion from the new price increase in order to control the monstrous circular debts of Rs1,640 billion owed by SNGPL and SSGCL.
In the meantime, within the current fiscal year, the government is thinking about raising the electricity tariff from Rs4.50 per unit in the first phase to Rs3 per unit in the second phase.
The government wanted FBR to collect Rs7,470 billion in taxes, but until December, FBR fell short by Rs225 billion. By a margin of Rs82 billion, the IMF’s target for the collection at the end of December 2022 was missed.
The PML-N government intends to levy a flood tax of one to three percent on imports to raise Rs100 billion.
Second, the government is considering imposing a tax of 60 to 70 percent on the alleged earnings that commercial banks make by manipulating the exchange rate. In the first nine months of the year 2022, the banks estimated that they made around Rs100 billion in extraordinary profits.
Cards will also see an increase in the Federal Excise Duty (FED) on cigarettes and sugary beverages, as well as GST on POL products. However, Finance Minister Ishaq Dar vehemently opposed imposing a 17% GST on POL products in the recent past, arguing that doing so would greatly increase inflation.
