IMF demands additional tax of 1300 billion – Pakistan

The International Monetary Fund (IMF) has demanded Pakistan to impose an additional tax of Rs 1300 billion in the upcoming budget. On the other hand, Pakistan has started negotiations with the IMF for a new 4-year program after which it is expected to receive 8 billion dollars.

Half of the new taxes are demanded to be collected from the salaried class and entrepreneurs.

According to a Tribune report, if the IMF’s demand is accepted, the annual target of the Federal Board of Revenue (FBR) will reach Rs 12.3 trillion.

Additional taxes of 1.3 trillion rupees are equivalent to one percent of the size of the economy next year. Government sources said that the IMF is demanding recovery of half of the additional tax from salaried and business persons.

Sources said the IMF has shared its final tax report with the government in which it has maintained its recommendation to reduce the number of income tax slabs to four for salaried individuals. If the government accepts this recommendation, it will massively increase the tax burden on the salaried and business people.

Sources say that the IMF’s demand for an additional tax of around Rs 1,300 billion or one percent of GDP will be discussed during the staff-level talks for the upcoming bailout package.

He said that the IMF’s demand for new taxes of Rs 1300 billion was not a final decision and the government would discuss the IMF’s demand on the issue of additional burden on the salaried class.

In addition, according to another report, Pakistan has started negotiations with the IMF under a new 4-year program.

It should be noted that the new government wants the CPS of the new 4-year program to be achieved in the next two months so that it can focus on priority areas.

In this regard, while talking to The News, an official said that Pakistan wants to get maximum amount during the next four to five years to meet the external financing requirements.