The Pakistan government had to impose additional taxes of 215 billion Pakistani Rupees (PKR) and slash expenditures by 85 billion PKR in order to strike an agreement with the International Monetary Fund (IMF), The News International reported on Saturday.
Although Pakistan was able to secure the IMF deal just in time, the conditions imposed by the body are turning out to be tedious to implement.
The announcement was made by Pakistan Finance Minister Ishaq Dar at the National Assembly.
While briefing the National Assembly Standing Committee on Finance and Revenues, Dar said that when the government had presented the budget on June 9, 2023, it was stated that no more taxes would be slapped, however, for striking the IMF agreement the government had to impose more taxes for clinching the new SBA programme.
“We have to make changes in the winding-up speech in view of the conditions of the IMF. Some concessions granted on June 9 were taken back in the amended Finance Bill 2023. Under the IMF program, it is forbidden to give tax exemptions or preferential tax treatments or amnesty schemes. Till we are in the IMF programme it is prohibited to grant any new tax exemption,” The News International quoted Dar as saying.
When he assumed the charge of minister for finance at the end of September 2022, the IMF was requested to visit for the review in November but the Fund staff delayed dispatching of its mission and they came on January 31, Dar said, adding the staff-level agreement could not be reached within the stipulated timeframe that created difficulties.
He said now there is a compulsion, Pakistan is in the IMF programme, he told the participants.
Dar further said that it is written in the IMF document that Pakistan will not give any kind of tax amnesty. He said that he had asked the FBR to convene a meeting with the real estate sector to work out revised evaluation rates of immovable properties across the country, The News International reported.
Notably, Pakistan is battling a huge economic crisis, with staggering inflation and depleting Forex reserves.
Weeks before, IMF approved a USD 3 billion bailout to support Pakistan in avoiding a default on its debt repayments.
With sky-high inflation and foreign exchange reserves barely enough to cover one month of controlled imports, Pakistan has been facing its worst economic crisis in decades, which analysts say could have spiralled into a debt default in the absence of the IMF deal.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)