Pakistan-IMF talks remain deadlocked over new taxes
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Imposition of new taxes can unleash a new wave of price hike
According to reports coming from Islamabad on Tuesday, it was difficult to achieve the tax collection target set for this fiscal year. According to sources in the FBR, the revised tax collection target is Rs5.238 trillion. The FBR will have to impose new taxes to achieve the target and imposition of new taxes will unleash a new wave of price hike in the country.
Last week, amid rumours of a rift in the government’s economic team, FBR Chairman Shabbar Zaidi went on sick leave for an indefinite period. Zaidi went on leave just two days before the IMF team arrived to monitor enforcement of the bailout terms.
The inflation rate in the country rose to 14.6 percent in January from 12.6 percent in the previous month, hitting the highest level in 12 years, the Pakistan Bureau of Statistics (PBS) said on Saturday.
Measured by the Consumer Price Index (CPI), inflation in Pakistan increased by 1.97 percent compared to the previous month. The highest inflation rate in the country was 17 percent and it was recorded in 2007-08.
The data released shows that higher food prices, particularly of wheat and flour, pulses, sugar, gur and edible oil, have been the largest driver of overall inflation in January.