ISLAMABAD: A meeting of think tank has decided to discuss reduction in sales tax with Federal Board of Revenue (FBR) to make part of proposals for budget 2020/2021.
Advisor to Prime Minister on Finance and Revenue, Dr. Abdul Hafeez Shaikh chaired 3rd meeting of the Thinktank, here on Sunday to assess the emerging situation resulting from Covid-19 related economic slowdown and its impact on individuals and businesses.
The forum decided that fiscal proposals including changes in rates of Sales Tax, refunds etc. would be deliberated with FBR in detail, so that next federal budget addresses these burning concerns which are essential to spur consumer spending.
In the previous meeting, the think tank discussed the viability of reducing General Sales Tax (GST) from existing 17 percent to five percent on consumer goods to kick start consumer spending.
Moreover, proposals related for financial and banking matters including review of payroll refinancing scheme, incentives to banks to finance MFIs and MFB, measures for enhancement of remittances and injecting additional liquidity to commercial banks by cutting CRR/SLR and CCB, were decided to be dealt by forum in more details.
The forum has the mandate to provide cognitive support to on-going response of the federal government apart from extending help in designing new initiatives and mid -course correction of interventions already under execution.
The forum has representation form eminent public finance practitioners, financial analysts, bankers, development and monetary economists and academia.
The participants included Advisor to PM on Commerce, Finance Secretary, Dr. Ishrat Husain, Shaukat Tareen, Dr. Ijaz Nabi, Sultan Ali Allana, Arif Habib and Dr. Waqar Masood.
Advisor to PM on Finance engaged all participants in extensive deliberations, while defining that the focus of the forum would remain on the short term urgently needed measures to give boost to economy which is under acute stress due to both demand and supply compression.
He emphasized the need to learn from international experience in designing fiscal, monetary and other policy responses by the Federal as well as Provincial Governments.
The think tank has devised an “Impact and Urgency Response Matrix” by identifying multiple actionable themes with low, medium and high economic impacts, pitched against short, medium and long time horizons.
The participants discussed the evolving economic scenario and identified priority areas which carry the potential of giving maximum boost to economy through accelerating aggregate demand and easing out supply concerns while also ensuring stability of financial system which is equally critical in robust recovery of the economy.
Advisor to PM, Dr Abdul Hafeez Shaikh emphasized the need for evolving road map for chosen domains, thereby bringing clarity about what needs to be done and who will do it.
The need for real-time data and research was highlighted in development of clear roadmap and implementation framework.
The forum selected six broad priority domains including boosting social safety nets (Ehsas and allied initiatives), food security and safety of supply chains, boosting role of banks and financial institutions in appropriately designing incentives for market participants, kick-starting low and medium cost housing projects, making PSDP and Provincial ADPs responsive to labor intensive propositions and business facilitation through fiscal interventions.
Advisor to PM on Finance concluded the session with the consensus decision that detailed roadmaps for chosen six domains would be prepared so that respective Ministries are engaged, to create further value in on-going plans meant for giving economic boost.
It was further decided that implementation review of PM Economic Stimulus Package (worth Rs. 1240 Billion ) would be a regular feature in next think tank meetings to ensure value for money apart from smooth service delivery to deserving segments of society.