China should manufacture things in Pakistan: Tareen

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Finance Minister urged Chinese govt to set up manufacturing plants in Pakistan as it does in ASEAN countries

ISLAMABAD: Finance Minister Shaukat Tarin on Wednesday underlined the importance to utilize China Pakistan Economic Corridor (CPEC) for promoting exports from the country. He said that China had made huge investment now it was time that Special Economic Zones are established here so that industries manufacture products for the export purpose.

Addressing his first press conference in Islamabad after assuming the charge as finance minister, Tarin said that the International Monetary Fund (IMF) had been informed that Pakistan didn’t currently have the capacity to raise its tariffs or taxes under the IMF programme, adding that the World Bank and IMF had been sympathetic to the point of view.

Tarin added: “Pakistan has not yet come out of the IMF programme, we have discussed with them and told them that our revenues were increasing at 92 per cent but the third wave of Covid came and they decreased after that.”

“At this time, we don’t have the capacity to increase tariffs or [adopt] incremental taxes, our common man is completely fed up of this inflation,” he said, adding that this had a cascading effect and inflation would increase once fuel charges were increased.

He added that this stance was conveyed and both the World Bank and the IMF had been very sympathetic to it. “We have to tell them that we won’t come out of the IMF programme but give us some space and we will change the method. Tariff increase is not the only way to raise money.”

He said they were concerned that Pakistan’s circular debt was increasing and there “should be some brakes” and stability in it. Tareen added that the government would prove that through various measures, but it didn’t mean that it would increase tariffs on the common person since Prime Minister Imran Khan was against it.

“We will apologise to them on this and they are sympathetic to us.”

Addressing taxation, he said its ambit would be further increased through “innovative methods” and the tax-to-GDP ratio would increase every year by one to two per cent. Tarin added that sudden increases on the orders of the IMF, as had been done in 2019, would “not happen. This is the wrong way of doing it”.