PTI government refuses to budge before IMF pressure to roll back PM Relief Package
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Disagreement on four critical issues has become an impediment in the successful conclusion of the ongoing seventh review meeting between Pakistan and the International Monetary Fund (IMF).
Sources said that increase in income tax rates, tax on pensioners, tax amnesty for the industrial sector, and the PM Relief package on electricity and fuel are the main factors that are delaying the successful conclusion of the 7th review, which started on 4 March 2022.
According to sources, the Pakistan side led by Finance Minister, Shaukat Tarin, could not convince the IMF staff on two important issues, which are PM Relief Package and tax amnesty scheme. The PTI Government has reached the point of no return on the issue of the PM Relief package as it cannot retract it due to political consequences.
The government is also opposing IMF’s proposal to increase the income tax rates, which is also a very harsh decision. The sources further told that the IMF proposed a five percent tax for people earning in the range of Rs. 50,000 to Rs. 62,500 per month.
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 to Rs. 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 monthly income in the range of Rs. 104,000, according to the sources. The 20 percent tax rate is currently imposed on individuals earning nearly Rs. 417,000.
