No plan for raising tax on salaries: IMF

F.P. Report

ISLAMABAD: The resident representative of International Monetary Fund (IMF) in Pakistan has clarified that the lending body has no plan to urge Pakistan to increase taxes on salaries, business income and media reports in this connection are baseless.

It should be mentioned here that there have been reports in media that the IMF asked Pakistan to cut the number of tax slabs for the salaried and business class from the existing seven to four, increasing tax incidence on the middle and upper-middle income group. There have also been reports of an increase in the maximum petroleum development levy. IMF’s resident representative in Pakistan Esther Perez Ruiz said that there have been such plan under consideration.

The South Asian nation was 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.

Under the bailout deal, the IMF also got Pakistan to raise $1.34 billion in new taxation to meet fiscal adjustments. The measures fuelled all time high inflation of 38% year-on-year in May, the highest in Asia, which still is hovering above 30%. Earlier, the Pakistani government has given assurance to the International Monetary Fund (IMF) on maintaining the power sector’s circular debt at Rs2.31 trillion.

The Power Division presented the details before the Senate Standing Committee for Power today. The caretaker federal government assured the IMF to maintain the circular debt of the power sector. The session of the Senate Standing Committee for Power was held under the chair of Senator Azam Nazeer Tarar. In a briefing, the Power Division officials said that the circular debt stood at Rs2.31 trillion by June 2023 which will be maintained.(INP)