"Restaurants are always crowded. "Cars are becoming more pricey," he observed.
Mr Tarin told media at the Pakistan Stock Exchange (PSX) that the World Bank's newest numbers show the poverty rate has reduced to 4.2 percent from 5.4 percent a year earlier. "Our concern is inflation," he explained, "which has disproportionately harmed the lower middle class in metropolitan areas."
Shaukat Tarin, the Prime Minister's Adviser on Finance and
Revenue, minimised the prevalence of poverty in Pakistan on Friday, arguing
that the rate has lately decreased.
The adviser said that rural communities were booming as a
result of plentiful harvests, which led to ‘record motorbike sales.' He also
thought the upper and middle classes were doing well.
"Restaurants are always crowded. "Cars are
becoming more pricey," he observed.
Prime Minister on Finance and Revenue Shaukat
Tarin reiterated his two-week-old warning to speculators in the foreign
exchange market not to play with fire. "I issue a warning to speculators:
the rupee will also move in the opposite direction." We're taking steps to
modify the trajectory [of the exchange rate movement]." He also stated
that the currency was undervalued by around Rs10.
Despite the fact that the open market exchange rate hovered
around Rs178 on Friday, the finance adviser insisted that the real effective
exchange rate, a technical measure that compares the value of a country's
currency to the weighted average of its major trading partners' currencies,
should be Rs165 to Rs167.
Tax breaks are being phased out.
He sneered at a reporter's inquiry regarding the
impending'mini-budget,' which would formalise the policy measures adopted under
the International Monetary Fund's soon-to-be-resumed loan programme (IMF).
"Don't try to make a big deal out of it." There is no such thing as a
mini-budget in this case. Some tax breaks will be phased out."
Mr Tarin claimed he stayed firm and refused to impose
additional taxes, despite the fact that the country's economic team had agreed
to "exemptions and new taxes" totaling Rs700 billion in March
discussions under the previous financial minister.
He stated he agreed with the IMF's argument against tax
exemptions in general. "What's the sense of distorting the system by
charging multiple sales tax rates?" he said, adding that incentives should
instead take the form of targeted subsidies.
Investing that is not fruitful
The financial adviser promised to implement a "certain tax plan," primarily for the real estate industry, so that non-productive investment might be "recycled to other sectors of the economy."
Mr Tarin said benefits to the real estate sector must be aligned with those extended to other productive sectors of the economy in his speech to mark the maiden listing on the Growth Enterprise Market (GEM) board, which is a separate counter of the PSX reserved for high-risk small and medium enterprises (SMEs). "In the real estate industry, we notice an abnormality when land parcels are purchased and kept for years. "That's sunk productive capital," he explained.
He advocated for the development of capital markets to
guarantee that SMEs had simple access to both loan and equity financing.
"Small businesses are overly reliant on banks for
finance. Banks, on the other hand, have a 33 percent GDP footprint. Lending [as
a proportion of deposits] accounts for only 42 percent. "This means that
banks only sustain 15% of GDP," he explained.
According to a news release, the financial adviser then went
to the Pakistan Banks' Association (PBA) office. The PBA expressed its concerns
to Mr Tarin about the 'huge difference' between the lower tax rates on
profit/dividends from stock market investments as well as mutual fund units and
the tax rates on profit from bank deposits classed as 'profit on debt,'
according to the statement.
Mr Tarin inaugurated the country's first Professional
Clearing Member (PCM) in the CDC House, according to a separate news statement
from the Central Depository Company (CDC). The PCM regime was implemented to
reduce the possibility of custodial defaults by shifting custody of shares to
the PCM, according to the statement.
Regarding the PBA's worries about the gap between bank and
corporate tax rates, as well as the continuation of the bank super tax, Mr
Tarin "understood and agreed with the PBA" and vowed to look into the
situation, according to the statement.