Taxation Strategy Unveiled by Pakistan’s Finance Minister Dar to Fulfill IMF Loan Conditions, Aims for Rs 215 Billion Revenue
Pakistan to Generate Rs 215 Billion in Tax Revenue to Meet IMF Loan Conditions
In order to meet the stringent conditions set by the International Monetary Fund (IMF) and secure a much-needed loan, Pakistan’s Finance Minister Ishaq Dar has announced plans to raise Rs 215 billion through taxes. The cash-strapped government is striving to fulfill all the requirements specified by the IMF before availing the loan.
During a three-day-long general discussion on the budget for the upcoming financial year 2023-24, Dar revealed that only Rs 215 billion in taxes have been agreed upon for the fiscal year. This measure aims to ensure that the burden does not fall on the poor and middle segments of society.
This announcement comes shortly after IMF Managing Director Kristalina Georgieva urged Pakistan’s Prime Minister Shehbaz Sharif to address policy differences within the IMF’s staff before receiving the loan. The IMF had signed a $6 billion deal with Pakistan in 2019, subject to the fulfillment of certain conditions.
However, the plan has faced several setbacks, and the complete disbursement of funds remains pending due to the IMF’s insistence that Pakistan completes all necessary formalities. To overcome these obstacles, a member of the federal cabinet joined talks in Islamabad, following the meeting between the IMF MD and Prime Minister Sharif. Both sides engaged in discussions regarding outstanding issues, with the government showing willingness to accept the IMF’s perspective on certain budgetary figures.
Finance Minister Dar further emphasized that Pakistan has approached the negotiations with the IMF in a sincere manner. He assured the House that once the matters with the international lender are resolved, the details will be made public.
The unlocking of access to the agreed $6 billion loan package has become crucial for Pakistan, as failure to satisfy the IMF’s requirements could lead to defaulting on external financing commitments. The country’s economy has been spiraling downward, and active support from the IMF is seen as vital to stabilize the situation.
To address this pressing concern, Pakistan intends to reduce running expenditures by Rs 85 billion, without affecting the proposed development budget or the salary and pension increases for federal government employees.
Pakistan’s ongoing efforts to meet the IMF’s conditions and secure additional bailout funds remain critical to steer the country’s ailing economy away from a potential crisis.