ISLAMABAD, Dec 4: Adviser to Prime Minister on Finance Shaukat Tarin has said the government will hunt ‘big fish’ involved in tax evasion, but will not impose any new tax this fiscal year, leaving a wild speculation that the next budget will carry a range of taxation measures in compliance with the IMF conditionalities.

“We will avoid new taxes before the upcoming budget. There will be no mini-budget in the remaining seven months of the current fiscal year, but we are considering a list of luxury and non-essential items for regulatory duty,” Mr Tarin said on Thursday while briefing a select gathering of journalists about the possible fallout of the IMF loan on the economy.

He said that there would no change in direct taxes or increase in other taxes before the next budget.

He said the government would introduce audit of all taxes to detect evasion. “We will randomly select five to seven per cent taxpayers for audits,” he said, adding the audit would be carried out through outsourced companies to avoid harassment of taxpayers.

“Many people are not filing returns. I will publish my tax return so that others could follow. Ultimately, stock exchange, agriculture and real estate will have to contribute their share in tax realisation,” the adviser added.

Due to increase in inflation, the revenue target has been raised to Rs1,360 billion from the projected Rs1,250 billion.

In reply to a question about the impact of phasing out of subsidy on electricity, Mr Tarin said no major increase was expected in the next tariff review in April.

He said the government had saved Rs45 billion in power subsidy because of falling oil prices in the international market. He said that Pepco had been asked to cover Rs75 billion by improving efficiency.

Although the power sector was allocated Rs65 billion as subsidy in the last budget, the government has recently passed Rs41 billion on to consumers.

Even after all these adjustments, the adviser said, an amount of Rs55 billion would remain outstanding for payment.

He said the issue of circular debt of about Rs200 billion would have to be resolved before the end of the year. This involved an outstanding amount of Rs80 billion from Fata, Rs55 billion from the KESC and Rs70 billion from consumers.

He said that all government entities which were running on losses would be privatised.

“Pepco has become a crocodile, if not handled properly it may eat us all,” the advisor warned, adding all those government entities will be privatised which were in red.

Asked that Benazir Income Support Programme (BISP) has yet to deliver assistance to vulnerable people despite lapse of six months, the adviser said that the system carried flaws which may be replaced with a new scheme.

“We will carry a random household income survey to identify deserving people. Direct support will be given to those people through a card system,” the adviser said. He pointed out that more than seven million households were living below the poverty line.

He said that the IMF had asked not to support stockbrokers through public money. But we will try to get approved any possible support for the small brokers, he added. “We have to decide the ‘floor’ issue soon without any support,” he remarked.

Even if the stock market fell by more than 20 to 25pc from the existing levels, he said we would be still better from many countries. To make SECP a stronger regulator, he said replacement of its chairman will come soon.

Asked about extension to the SBP governor, the adviser said the president will decide it. I have no idea about that,” he said.

Asked whether the SBP would work independently, the adviser said it was a debatable issue. However, he added inflation edged up due to massive borrowing from the central bank last year for budget financing.

He said the government borrowed Rs250 billion from the central bank in the first quarter but not utilised for the budget financing. “This government is responsible and committed to bringing the borrowing at zero level since October 2008,” he assured.

The total requirement for balance of payments is between $10.5 billion to $11 billion for the year 2008-09. Of these $6.5 billion will be provided by the IMF and $4.5 billion from international financial institutions (IFIs) while the remaining will come through remittances. He said the money flowing in from Friends of Pakistan will help in building forex reserves.

Replying a query he said that there might be a reduction of Rs100 billion in the development budget. “We would rationalise the PSDP. We still have Rs400 billion in the banks,” he added.

The adviser said that draft for making Federal Bureau of Statistics an independent body has been approved. “We do believe in accurate statistics,” he replied.