PM vows increasing Tax to GDP ratio to 15 pc in 5 years

Prime Minister Yusuf Raza Gilani on Monday while mentioning the governments achievement in successfully increasing the Tax to GDP ratio from 8.8 to 10.6 per cent in one year, expressed his governments firm commitment to further enhance it to 15 percent in next five years by broadening the tax base.He was talking to Head of Mission, International Monetary Fund (IMF) Adnan Mazarei and Paul Ross, Resident Representative of IMF in Pakistan who called on him at PM House here. Gilani said the government had taken steps to implement macro economic reforms such as phased removal of subsidies on petroleum and power prices, tightening of monetary policy, increasing revenue and controlling expenditures while reducing borrowing from the State Bank. He said due to stringent fiscal measures, the government had successfully brought down the fiscal deficit from 7.6 per cent to 5.2 per cent, recorded a reduction of 33 percent while the foreign exchange reserves improved to the level of US$14.3 billion. The Prime Minister expressed satisfaction over the overall economic situation in the country and said all economic indicators had started showing positive trends due to the governments timely intervention and introduction of corrective measures. He said economic well-being of the people through infrastructure development and increasing economic opportunities were some of the priority areas for the government. Appreciating the IMF for their help in substantiating governments efforts in overcoming economic challenges due to global recession and providing additional US$ 2.4 billion, the Prime Minister told Mazarei about the governments approach to address problems like poverty, energy shortage in the country, limited access to public services, and extremism through a combination of administrative, political and security measures. He underlined that economic development was vitally important component in the long-term perspective before the government. He said the government had also taken steps to improve power situation in the country by installing new power plants as well as tapping alternate energy sources besides encouraging conservation of energy. Adnan Mazarei appreciated that Pakistan government had taken decisions in difficult times. He said the Fund Board had fully acknowledged the achievements of Pakistan in enhancing tax to GDP ratio, reducing inflation and improving the overall economic situation by adopting right economic policies. The meeting was attended by Shaukat Tareen, Federal Minister for Finance, Hina Rabbani Khar, Minister of State for Finance and Economic Affairs, Special Secretary Finance and Chairman FBR.

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