ISLAMABAD - The government on Saturday ruled out the possibility of approaching the International Monetary Fund for a fresh bailout package as the current account deficit would be controlled through government’s measures including recent rupee depreciation.

“We have no plan to approach the IMF for the bailout package,” said Finance Minister Dr Miftah Ismail in a post-budget press conference along with Special Assistant to Prime Minister on Revenue Senator Haroon Akhtar.

He further said that the foreign exchange reserves would increase before June as the government today (Saturday) secured $1 billion financing. Reserves held by the State Bank of Pakistan recently fell down to below $11 billion due to the widening current account deficit.

Senator Haroon said that the government has taken two major steps to improve the current account deficit including announcing exports package, impose regulatory duty on luxury items and resorted to currency devaluation twice.

“These measures had increased the exports by over 13 percent in nine months (July to February) of the current fiscal year and growth of imports has also reduced. There is no need to panic as the government has taken measures for the economy and they have proven fruitful,” he said.

Ismail said that the government has set realistic targets in the budget 2018-19 as there would be no need for supplementary grants next year. He said that the government has facilitated the existing taxpayers in the budget. “The government would soon constitute a committee to formulate an incentives package for the exports. Another committee on removing anomalies in the budget would be constituted with representatives from business community,” he said.

The finance minister said that the government has increased the limit of petroleum levy to Rs300 billion as it did not actualise the levy. He admitted that the petroleum levy could be challenged in the court. He said that petroleum prices are lower in Pakistan as compared to other countries. “We have given an opportunity to the next government to raise funds from it,” he said.

The government has increased the estimated amount from the petroleum levy to Rs300 billion instead of Rs170b this year — through Rs30 per litre levy on all petroleum products across the board from existing Rs3-10 per litre.

He said that the government has allocated Rs100 billion in the budget for eliminating the circular debt, which has swelled to Rs450 billion. “After clearing Rs100 billion, the amount of the circular debt would reduce to Rs350 billion that is right level,” Ismail said. He hoped to restrict budget at 5.5 percent of the GDP during the current fiscal year and to bring it down to 4.9 percent of the GDP next year.

He said that the government has imposed a nominal tax of Rs1000 on income between Rs400,000 to Rs800,000 and Rs2000 on income between Rs800,000 and Rs12,00,000 to make them taxpayers. Otherwise, due to the enhancement of the taxable limit of income to Rs1.2 million, the number of filers will substantially reduce.

Senator Akhtar said that the government has doubled the tax collection to Rs4 trillion in 2018 from Rs2 trillion in 2013. The federal government has transferred Rs2500 billion to the provinces under the divisible pool that was around Rs1300 billion in 2013. He said that inflation has been kept at an average of 4.5 targets.

Akhtar said that there would be tax audit once-in-three-year while salaried class has totally been exempt from the audit. A simplified tax return has also been introduced. “An alternate dispute resolution committee has been formed and their decision is binding, this a huge relief provided to the business community,” he said.

He said that the government in the budget has proposed to reduce the super tax gradually in the next few years. The government has recommended reducing the super tax by one percent, as the tax is currently being charged at 4 percent on banking companies and at 3 percent on non-banking companies having income greater than Rs500 million. “Duties on raw materials are low, local industries to be protected. Our budget looks out for the local industries,” he said.

“To all those who say this budget is only ‘give and give’, it’s not, it ensures that revenue measures increase,” Haroon said. Taxes on cigarettes, cement and steel have increased. The government has also imposed a restriction on non-filers in respect of the purchase of property above four million rupees, he said adding that there would be no tax on remittances worth Rs10 million and the government would ask about the source of income if the remittances limit exceeds. The NADRA data would be shared with banks to trace potential taxpayers, he said.

Ismail said that he had planned on contest the upcoming general election from NA-252 Karachi, but after delimitation of constituencies, Prime Minister Shahid Khaqan Abbasi has recommended that he contests from both NA-243 and NA-244 seats.

“The package announced for Karachi by the PML-N yesterday could not be announced by the MQM in the last 25 years,” he said.