ISLAMABAD: The Pakistan Muslim League-Nawaz government took out $24.93 billion external loans in the last three years.
The Finance Ministry’s debt director general (DG) revealed this before the Senate’s Standing Committee on Finance, Revenue and Privatisation on Wednesday.
He said further the net borrowing during these three years remained $12,990 million after repaying the loans of $11,946 million.
“Pakistan has to pay $2,748 million as a mark up in the coming years,” he added.
Senator Mohsin Aziz said, “It is known from different sources that the over debt has reached to $73 billion and if we calculate the percentage of debt to GDP ratio, then what would be the answer.”
The official replied that the country’s external public debt stood at $58 billion; $15 billion are non-public debt, which are being borrowed from commercial banks and SBP. Pakistan Debt to GDP ratio is around 66.5 percent, he said.
Committee Chairman Senator Saleem Mandviwala said that it is against the Fiscal Responsibility and Debt limitation Act 2005 and according to that Pakistan’s debt to GDP ratio cannot exceed 60 percent.
The official said the government is struggling hard to bring down the debt to GDP ratio and in next 15 years, the ratio would be brought down to 50 percent.
Senator Aziz asked, “How will you come to 50 percent in next fifteen years? Do you have any plan, and if you have one share it with us.” The debt DG said the government has prepared the next three-year budget framework and every plan is mentioned in the document and it can be shared with the committee.
The chairman asked, “Do you have the breakup of loan which you got from different countries and lending institutions in last three years?” Official answered, “We can share it with you in the next meeting.”
Briefing the committee, FBR Member Rehmatullah Wazir said the government collected Rs 421,223 million sales tax on petroleum products in 2015-16, Rs 351,984 million in 2014-15 and Rs 361,222 million in 2013-14.
Sales tax rates on petroleum products change monthly. Currently, the sales tax on MS motor spirit, high octane blending component, superior kerosene oil, high speed diesel and light density oil are 20%, 20%, 5%, 36.5% and 12 percent respectively.
Senator Aziz said sales tax on HSD was 17 percent in 2013 and it was enhanced to 36.5 percent in October 2016. What is the reason behind increase? The senator inquired.
Petroleum product rates have substantially decreased over the year and it is around $45 to $50 per barrel and it is good that the government has transferred the benefit to the people. On the other hand, it increased the sales tax on petroleum products. The FBR is collected most of the money from indirect and withholding tax.
Wazir replied the government has increased the sales tax on petroleum products to increase the revenue and “it is our right”.
Senator Kamil Ali Agha said the sales tax rates on petroleum products should be the same and the committee recommended the government to apply this.
The committee directed the government to apply the uniform sales tax rates on all petroleum products.
A National Bank of Pakistan official said, “The bank has detected embezzlement in the Prime Minister’s Youth Loan Scheme in Mardan Region and we have suspended 10 officials in this regard.” The manager operations had transferred Rs 77.8 million to his brother’s account, Rs 55 million have been recovered from the account and remaining Rs 24 million would be recovered soon, they added.
“We are waiting the inquiry report and after fixing responsibility we will send it to NAB or FIA,” he added. Senators Mushahidullah Khan, Mohsin Leghari, Mohsin Aziz, Sardar Fateh Muhammad Hassani, Kamil Ali Agha and Nuzhat Yasmeen attended the meeting.
