New York-based credit rating agency Standard & Poor’s (S&P) has affirmed Pakistan’s rating outlook ‘stable’ with long-term ‘B’ rating. The rating agency has also kept short-term ‘B’ rating. Standard & Poor’s said that the country’s rating remains constrained by a narrow tax base and domestic and external security risks, which continue to be high.

The rating agency said that the COVID-19 pandemic exacerbated Pakistan’s economic downturn but forecast the real gross domestic product (GDP) to recover to 1.3 per cent during the current fiscal year.

“We expect the sovereign’s credit metrics to remain under pressure for the next two to three years”, the S&P said.

The agency, nevertheless, noted that the government had made solid progress toward important fiscal and economic reforms prior to the start of the global coronavirus outbreak, and reform momentum should return once the pandemic was better contained. Multilateral and official funding will remain critical to Pakistan’s external debt sustainability.

It said the stable outlook reflected rating agency’s expectations that funding from the International Monetary Fund (IMF) and other partners, along with a recent improvement in Pakistan’s balance of payments position will be sufficient for the country to meet its considerable external obligations over the next 12 months.

Pakistan’s economy is likely to recover only gradually as the global pandemic is progressively better contained. The agency forecast a modest expansion of 1.3 per cent in Pakistan’s economy in FY21.

Meanwhile, a delegation of All Pakistan Textile Mills Association (APTMA) called on Dr Muhammad Ashfaq Ahmed, Member Inland Revenue Operations of the Federal Board of Revenue and discussed in detail the issues pertaining to the release of Sales Tax refunds in seventy-two hours, removing irritants of the Annexure-H, issuance of Income Tax exemption on electricity bills, delay in Income Tax refunds and other irritants faced by export oriented industries.

APTMA delegation comprised of Raza Baqir and Shahid Sattar while the Member Inland Revenue Operations was assisted by concerned chiefs and secretaries of the Board.

Dr. Ashfaq reiterated the resolve and commitment of the government for expeditious payment of tax refunds and removal of all irritants in doing the business. He told APTMA delegation that release of refund claims has been expedited by the Board and it would be ensured that all sales tax refunds are paid within 72 hours.

He said all the systematic issues relating to Annexure H would be removed within a week which will facilitate exporters in filing of refund claims. He added that Annexure-H would be simplified to facilitate the taxpayers. According to him, the trial test of the changes made in software of Annexure-H is underway and it would be implemented shortly.

He said the board was also releasing the outstanding and deferred refund claims of the exporters on war-footing basis.

Furthermore, he urged the APTMA delegation to convey all member mills to file their Income Tax refunds at the earliest for speedy clearance.

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