Pakistan, IMF want economic sustainability in different ways — finance minister

KARACHI: Pakistan’s finance minister Shaukat Tarin said on Friday the government and the International Monetary Fund (IMF) were trying to pursue economic sustainability for the country, though he added that they wanted to achieve the objective in two different ways.
Pakistan secured a $6 billion IMF loan in 2019 amid an acute financial crisis. The government now hopes to renegotiate some of its stringent conditions since it believes they are likely to contribute to the inflationary pressure and create greater economic hardships for people.
“My job is to tell the IMF that your path and our path may be different, but our destination is the same,” the finance minister told journalists at the Federation of Pakistan Chambers of Commerce and Industry (FPCCI).
“Our path is to make economic growth sustainable. We don’t always manage to achieve it due to our revenue shortfall. The other issue pertains to our exports due to which we remain short of dollars. We are concentrating on both so that the IMF does not have any problems with us,” he continued as he emphasized the necessity of export and revenue growth in Pakistan.
Speaking to the FPCCI members, Tarin said the IMF wanted to withdraw all the exemptions and increase personal taxes.
“I have taken a stand with them [the IMF] and said that we will not increase personal taxes,” he informed. “The IMF wants to withdraw all the exemptions and increase personal tax by Rs150 billion. This is the prescription of Rs500 billion to Rs700 billion which we avoided.”
The country has so far received about $2 billion under the IMF loan after the international financial institution released $498.7 million in March this year.
The finance minister said on Friday Pakistan would not be able to achieve growth until its people paid their taxes. He also noted that the government had taken steps to broaden the tax net with the help of technology.
“Our tax collection should be 20 percent [of the GDP] since that will allow us to achieve the growth rate of six to eight percent which will then make it possible for the country to create 1.5 million to two million jobs annually,” he added.
When the FPCCI members complained of receiving too many tax notices, the minister assured them that they would all be withdrawn to put an end to “harassment and corruption.”
In the future, he assured them, tax notices would only be issued by third party auditors after doing due diligence.

Pakistan, IMF want economic sustainability in different ways — finance minister