As policy-level talks kick off, IMF stresses higher tax collection in Pakistan
ISLAMABAD: The International Monetary Fund (IMF) has expressed its dissatisfaction at the current state of Pakistan’s tax collection, a team representing the body that arrived here in the city to discuss the country’s ongoing financial crisis said late Monday.
Earlier in the day, the delegation, which has already concluded the technical discussions with the Pakistani representatives, commenced its policy-level talks with ministers and representatives of the Federal Board of Revenue (FBR).
Members of the team, led by Harald Finger, a senior economist and an adviser to the IMF, further stressed on effective measures required to increase the tax collection in order for Pakistan to deal with and recover from its financial crunch and current account deficit.
According to sources, the IMF also indicated its support towards the FBR’s move to send notices to tax defaulters that, according to the federal government body, have been issued to thousands of the non-payers at present.
Sources also confirmed that there were two rounds of policy-level talks between Pakistan and the IMF; in the first one, the delegation met with Finance Minister Asad Umar and officials from the State Bank of Pakistan (SBP), whereas in the second, it met with the FBR representatives.
Reportedly, the Pakistani delegation comprises Secretary Finance, FBR chairperson, and Tariq Bajwa, the governor of the SBP, among other officials.
The IMF delegation, sources further noted, was briefed on the tax collection target for the ongoing fiscal year as well as the financial performance during the first four months, starting July 1, 2018 (FY18-19).
The team said it was difficult to achieve the goal of curbing the financial crisis without increasing the tax collection, sources mentioned, adding that it also underscored the need to widen the tax scope.
In addition, the IMF representatives were apprised of the Pakistani government’s efforts to bump up the tax collection.
The discussions are set to continue till November 20, 2018. Prior to that, from November 7 — when the IMF team arrived in Pakistan — to November 9, technical talks were held, during which data pertaining to the performance of various sectors was presented.
Starting November 12, the policy-level talks are set to continue through November 20. The IMF is expected to review the country’s monetary and fiscal policies as well as its monetary needs in keeping with the current account deficit.
It would also review the SBP’s financial independence and the FBR’s performance.
Further, sources said Pakistan may ask the international money lender for up to $6 billion. Islamabad had formally approached the IMF in October for loans.
Last month, IMF chief Christine Lagarde had said she met Umar, Bajwa, and members of their economic team and it was then that Pakistan made its formal requested for financial assistance.