Policy-level talks: IMF presses for higher tax collection in Pakistan

ISLAMABAD: As the policy-level discussion kicks off for a possible bailout package, the International Monetary Fund (IMF) appeared discontended with the current state of tax collection in Pakistan. 

A team representing the body, led by Harald Finger, stressed that the country’s ongoing financial crunch requires effective measures and a need to increase tax collection.

The Pakistani delegation included secretary finance, chairman federal board of revenue (FBR) and State Bank of Pakistan (SBP) Governor Tariq Bajwa among other officials.

As per IMF’s suggestions, raising tax collection will help recover Pakistan’s sinking economy and its current account deficit.

According to sources, the Fund also extended its support towards the Federal Board of Revenue’s (FBR) move to send notices to tax defaulters.

The policy-level discussion, between IMF and Pakistan, is a second phase of talks which began a day earlier in order to procure a bailout package to cushion the economy of the latter.

The policy-level talks be carried out until November 20.

Last week, the first phase of talks, regarding the technical discussions on a potential bailout package, was concluded in the federal capital. Pakistani officials informed the visiting IMF delegation about the government’s intention to establish a ‘wealth fund’to turn the loss-making state owned entities into profit making enterprises before their privatization.

According to sources, the government has informed the visiting IMF team that it has planned to privatize seven state-owned enterprises initially.