PTI government lock horns with IMF
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Deadlock persists between the International Monetary Fund (IMF) and the Ministry of Finance over the issue of tax collection. Both sides had failed to agree on setting the tax target and increasing electricity and gas tariffs.
Sources further disclosed that the government had refused to accept the condition set by the international money lending organisation to levy additional taxes ranging between Rs140 billion and Rs200 billion.
Similarly, it has been learnt that differences persist over the government’s plan to offer tax exemption to different sectors in the upcoming national budget. Sources divulged that Pakistan did not want to take dictation from the Fund on increasing tax collection as it insists it has its own way of increasing the amount.
FBR has told the IMF that it wants to increase the collection of taxes through ‘Enforcement’ and ‘Administration’.
On May 28, the government had rejected International Monetary Fund’s (IMF) proposal to increase taxes on the salaried class.
The 24News TV channel had learnt from its sources that the Fund had suggested to the FBR to increase the amount of tax deducted from the salaries of people every year from Rs129 billion to Rs300 billion, but the latter rejected it, saying it was difficult to implement.
Sources further disclosed that the FBR had also rejected IMF’s suggestion to set the overall tax target at Rs5, 963 billion, and conveyed to the international money lending organisation that the Rs5, 700 billion could be a reasonable target.
Earlier, on May 25, 24 News had reported that the deadlock between the IMF team and Pakistan economic gurus seemed to persist as the international money-lender refused to let go of its condition of levying additional taxes on Pakistani people.
According to sources, the IMF has given a target to the Federal Board of Revenue to levy additional taxes and set Rs6,000 billion collection target.
The lending agency has asked the government to introduce extra taxes in the upcoming budget of fiscal 2021/22.
The sources said the government had termed Rs6,000 billion tax target unrealistic pleading to the lender that it was hard to levy additional tariffs on already economically stressed people.
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