IMF & Pakistan Working For New Program.
An IMF technical team is in Pakistan to discuss policy recommendations for a potential new program for the country.
The team has met with key government officials, including finance and commerce ministry officials.
They have also met with a task force established to formulate recommendations centered on reforms.
The IMF is reviewing the 2019 policy document, taking into account the present economic situation.
The 2019 program included measures such as the imposition of federal excise duty and additional taxes on beverages within the tobacco sector.
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The IMF has also called for an increase in the personal income tax rate and the removal of unnecessary exemptions from the Goods and Services Tax (GST).
Finance Ministry officials said that other stipulations, such as a petroleum development levy, were integral to the program.
The IMF has previously provided a loan program to Pakistan.
The current visit is aimed at assessing and addressing the economic landscape, paving the way for potential policy adjustments and financial support.
Tax reforms on the agenda: IMF & Pakistan Working For New Program
The IMF has insisted on raising the tax-to-GDP ratio to 15%. They have also demanded to bring the rich into the tax net.
The consultations are also likely to feature a discussion on the mechanism to bring retailers into the tax net. The global lender will provide policy guidelines for the proposed scheme.
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The target is to bring 1-1.5 million people into the tax net by June 2024, while the number of taxpayers will be taken up to 6.5 million by then.
Moreover, third-party data and technology will be used to expand the tax net.
Any amendments proposed to the tax policy as a result of the negotiations will be implemented from the new budget.
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