Disagreement on four critical issues has become an impediment in thesuccessful conclusion of the ongoing seventh review meeting betweenPakistan and the International Monetary Fund (IMF).
Sources said that increase in income tax rates, tax on pensioners, taxamnesty for the industrial sector, and the PM Relief package on electricityand fuel are the main factors that are delaying the successful conclusionof the 7th review, which started on 4 March 2022.
According to sources, the Pakistan side led by Finance Minister, ShaukatTarin, could not convince the IMF staff on two important issues, which arePM Relief Package and tax amnesty scheme. The PTI Government has reachedthe point of no return on the issue of the PM Relief package as it cannotretract it due to political consequences.
The government is also opposing IMF’s proposal to increase the income taxrates, which is also a very harsh decision. The sources further told thatthe IMF proposed a five percent tax for people earning in the range of Rs.50,000 to Rs. 62,500 per month.
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Currently٫ the government is charging 5 percent for income up to Rs.100,000 per month. For the income group having a monthly income of up toRs. 79,000, the IMF has proposed a 10 percent income tax rate. Currently٫the government is charging this rate to only those who earn up to Rs.150,000 a month.
The IMF has also proposed to slap 20 percent income tax on the monthlyincome in the range of Rs. 104,000, according to the sources. The 20percent tax rate is currently imposed on individuals earning nearly Rs.417,000.
