ISLAMABAD  -   Finance Minister Asad Umar said yesterday that Pakistan will have to do a lot in next three months to remove its name from Financial Action Task Force (FATF)’s grey list.

He informed the National Assembly Standing Committee on Finance and Revenue that government had proposed amendments in four laws including Benami Act, Customs, Anti Money Laundering Law and Federal Investigation Agency (FIA), which would be presented in parliament for approval. The government will have to take action in next three months as the FATF next round will be held in May 2019, he added. “The next stage is related to apprehensions and sentences, which is difficult task,” he said.

“FATF has expressed satisfaction with the National Risk Assessment Report that Pakistan had submitted till January. However, the major issue FATF had was Pakistan not declaring banned outfits high risk. Now, we have fulfilled that condition.”

The finance minister said that before FATF board meeting he received calls from different friendly countries informing him that India had been going to individual companies and lobbying against Pakistan. “India is lobbying against Pakistan in FATF through various companies, as New Delhi wants to blacklist Islamabad as early as possible. That is why we have demanded the FATF to revoke India’s position as co-chair of its Asia-Pacific Joint Group in light of this abuse of position.”

He informed the committee that there was no major devaluation of currency in sight. He further informed that talks with International Monetary Fund (IMF) were continuing and differences on issues had narrowed down.

Umar rejected the impression that multilateral sources had slashed funding for Pakistan. The inflows from multilateral sources had estimated to US$ 5.6 billion which the government was committed to achieve by the end of June 2019 backed by portfolio reviews and stronger monitoring measures taken by the government. Actual inflows from multilateral and bilateral sources in FY2017-18 were US$4.784 billion.

The finance minister admitted that inflation had increased which was worrisome for the government. He clarified that inflation had increased by only 2 percent during first six months of the incumbent government as against 5.5 percent increase in first six months of PML-N’s tenure and 10 percent increase in initial months of the PPP. He explained that inflation had enhanced due to increase in prices of electricity and gas. The previous PML-N government had not increased the prices of gas and electricity in last few years due to elections. The losses of power and gas sectors increased to Rs600 billion that forced the government to increase the prices.

He informed the committee, “Our foreign reserves have gone up and situation of the economy is stable.” He said that a draft framework will be presented to this standing committee for preparing the budgetary proposals for upcoming budget 2019-20. He directed the ministry to provide detail of foreign currency loans along with its terms and regulations to the committee and also directed the special secretary finance & revenue to provide details of the foreign currency loans on regular basis to this forum. The committee members expressed their concern for not being invited to the members of the committee at the ceremony of low cost housing schemes by the government. Umar assured the committee that he will pass on the concern of the committee to the prime minister. The panel unanimously recommended that standing committee should be taken on board in future about such events.

Umar proposed the committee to come up with recommendations for economic framework and upcoming budget for next fiscal year 2019-2020. The committee members welcomed the proposal of the finance minister.

The members expressed their concern on the overall fiscal deficit and debt servicing issues. They were of the view that current expenditures were increasing, which will create hurdles for balance of payments. The committee discussed the problems being faced to the filers for filing of tax return. The panel unanimously recommended to FBR that filing of tax return date should be extended till 31st March.

Discussing the problems being faced by the processing units of textile, the committee directed the FBR to constitute a body under the supervision of Federal Board of Revenue for further deliberations with stakeholders in this regards and maintainable solution might be submitted to this committee by 1st week of April.

The committee discussed the problems being faced by real estate sector regarding FBR valuation table, DC valuation and upper cap imposed by the FBR. The members agreed to the viewpoint of stakeholders, however, it was decided that other stakeholders i.e. provinces might be taken on board and directed the FBR to make friendly policies for the said sector. The chairman of the committee was of the opinion that agriculture sector and real estate sector had huge potential for revenue collection.