Pakistan will raise import duties on 5,000 different items and slash spending on infrastructure projects in an attempt to balance its budget, the government of Imran Khan has announced.
Warning that Pakistan was “on the precipice of a crisis”, Asad Umar, finance minister, on Tuesday unveiled a range of measures to cut the country’s budget and current account deficits.
Mr Khan’s party has inherited the widest budget deficit in years and an impending foreign currency crisis. His first budget marks a definitive shift away from the tax cuts offered at the end of the previous Pakistan Muslim League-Nawaz administration.
伊姆兰•汗的政党所接手的，是巴基斯坦多年来最大的预算赤字，以及一场即将爆发的外汇危机。他的首份预算案所走的路线，显然与上届巴基斯坦穆斯林联盟（谢里夫派）(Pakistan Muslim League-Nawaz)政府在执政末期推出的减税政策相左。
High imports and limited exports have left Pakistan perilously low on foreign reserves — a situation that could yet force the country to approach the International Monetary Fund for a bailout.
The moves come as Pakistan’s neighbour India weighs taking similar action to prevent its own currency from falling further. Both countries have been hit by concerns about the health of emerging economies worldwide following problems in Argentina and Turkey.
Mr Umar said: “The warnings came long ago: we are now at the precipice of a crisis. If our reserves fall any further, we can imagine what the impact on the common man will be.”
In an effort to stabilise the Pakistani rupee and cut the current account deficit, Mr Umar announced that tariffs would be raised on 5,000 goods, including powerful cars, more expensive mobile phones and jewellery.
Mr Umar also announced several measures to cut government spending and increase taxes.
Spending on development projects such as roads and water systems will be cut by almost Rs250bn to Rs725bn.
The tax rate on annual income above Rs5m ($41,500) will go from 15 per cent to 25 per cent for salaried workers, and 30 per cent for those whose income does not come from a salary. Tax breaks for high earners and civil servants will be scaled back.
Mr Umar said the moves would bring the projected deficit down from 6.6 per cent of gross domestic product to 5 per cent. “The economy is in the intensive care unit and we want to get it out of the emergency situation,” he added.
The cuts have left relatively little room for Mr Khan’s government to bring in the kind of health and education spending the former international cricketer promised on the campaign trail. But analysts say they are necessary if the country is to seek a bailout from the International Monetary Fund in the coming weeks.