Pak-IMF talks: Caretaker govt not to impose 'any new tax'

ISLAMABAD: The caretaker government will not impose “any new taxes” as the officials have convinced International Monetary Fund (IMF) mission, visiting Pakistan, to review the country’s economic performance, ARY News reported on Monday, citing sources.

Pakistan is operating under a caretaker government after an IMF loan programme, approved in July, helped avert a sovereign debt default.

Under the $3 billion standby arrangement (SBA), Pakistan received $1.2 billion from the IMF as the first tranche in July.

Last week, an IMF mission kicked off its review for the second loan tranche, which is expected to continue till Dec 15. A successful review would unlock $710 million for the country in December.

Sources told ARY news that a major breakthrough in talks between Federal Bureau of Revenue (FBR) and IMF review mission has been achieved.

The caretaker government has convinced International Monetary Fund (IMF) that it will not impose “any new taxes” on already-burden people of Pakistan, they claimed

Informed sources claimed that IMF had agreed on maintain the tax target at Rs9,415 billion.

During the meeting, sources said, the revenue board presented a written plan for achieving the tax target while assuring to achieve it.

The officials also assured the review mission of ending ‘tax evasion’ from the real estate sector, sources quoting FBR said, terming ending of tax evasion in the particular sector ‘a necessity of the economy’.

It is pertinent to mention here that the International Monetary Fund’s (IMF) review mission earlier met with Pakistani authorities and commended the government on its progress toward economic recovery.

“Nathan Porter, IMF Mission Chief, appreciated the government’s commitment to meeting the first-quarter targets, and commended the government’s efforts and measures taken in some critical areas,” the ministry said.

The ministry’s statement added that caretaker Finance Minister Shamshad Akhtar briefed the IMF mission on fiscal measures and discussed reforms and measures undertaken by Pakistan’s taxation body, as well as the government’s strategies to address its circular debt issue.

Circular debt is a form of public debt that builds up in the power sector due to subsidies and unpaid bills.