The International Monetary Fund has recommended levying Rs200 billion in additional taxes and cutting back on subsidies given under income and sales tax in various sectors of the economy.
The IMF’s technical team, which is in Pakistan for a two-week visit ending February 13, made these recommendations to the government so it could jack up its revenue.
Pakistan’s progress is being reviewed under the $6 billion Extended Fund Facility (EFF) programme signed in July 2018. A technical review will be followed by a policy-level discussion at the headquarters of the Washington-based lender, which will then disburse the three year programme’s next instalment of $450 million.
Officials from the finance ministry and the Federal Board of Revenue, the two groups representing Pakistan, briefed the IMF mission about the country’s progress on the reforms agreed under the programme.
The government updated the visitors about catching tax evaders and documenting the economy.
They informed the IMF that the government was able to increase tax collection by 16.3% over the corresponding period of 2018 while remittances have jumped 3.3% over the same period. They also shared details about the increase in the number of tax filers and refunds honoured by the government till December 2019.
Briefing the mission about the energy sector’s progress, the Pakistani officials said inter-corporate debt was reduced to Rs12 billion a month, down from Rs30 billion a month previously.
