IMF presses Pakistan hard for more taxes
Amid a stagnant economy further crippled by the coronavirus pandemic and ever-shrinking purchasing power of people, the International Monetary Fund (IMF) is pressing Pakistan hard for setting even higher taxation targets in the next budget.
According to 24NewsHD TV channel, the government has been told that it must set the overall revenue target at Rs5,100 billion which means new taxes of around Rs800 billion.
As far the budget deficit is concerned, the top international financial institution says it should 0.4 percent of the GDP (gross domestic product).
It doesn’t stop there as the IMF is also calling for allocating Rs2,700 for debt servicing and interest payment with a warning that the debt programme won’t be launched again without the abovementioned targets.
Meanwhile, it also learnt that the finance ministry is not ready to take responsibility in the given situation and wants Prime Minister Imran Khan to meet these demands himself. The ministry is reluctant to take any decision on the suggested budget targets, sources said.
As far as the current financial year 2019-20 is concerned, the FBR was initially supposed to collect Rs5,550 billion but the target had been revised to 5,238 after talks with the IMF.
But meeting even this revised target has become impossible due to the coronavirus pandemic as the FBR will be able to generate around Rs4,000 only by June 30. In this scenario, the sources say, the Rs5,100 target could be a challenge in the next financial year.
The latest demands come as the dollar was being traded at Rs159.80 in inter-bank rate on Monday following the devaluation proposed by the IMF.
Earlier, 24NewsHD reported that the Punjab government had slashed the budget allocated for the teaching hospitals to buy medicines.
On the other hand, the PPP-led Sindh government was also forced on Monday to withdraw the relief provided to the people in the Covid-19 Emergency Relief Ordinance 2020 in connection with the electricity and gas bills.
It took the decision as Governor Imran Ismail had not signed the ordinance, stating the subject was related to the Centre.