News Desk |
The International Monetary Fund (IMF) has disclosed in its recent report that the Pakistan Tehreek-e-Insaf (PTI) government’s actual tax measures amount to a record Rs733.5 billion as opposed to PTI-led government’s claim of imposing only Rs516 billion taxes.
In the report, the IMF has revealed that the PTI government understated the amount of taxes imposed on people for the fiscal year 2019-20.
While giving the complete breakup of the additional taxes that were estimated at Rs733 billion or 1.7 percent of the gross domestic product (GDP), the international money lender’s report has disproved the government’s claim that it had imposed Rs512 billion worth of taxes that were equal to 1.2 percent of the GDP.
The IMF and Pakistan reached a staff-level agreement on economic policies for a three-year Extended Fund Facility (EFF) on May 12.
The government had claimed of collecting only Rs51 billion additional taxes from the salaried class, however, the IMF has revealed, the actual burden would be Rs90 billion.
IMF report has stated that an amount of Rs45 billion would be collected from those who were not in the Active Taxpayers List. IMF has estimated the impact of the property valuations at Rs44 billion.
In addition, it said, Pakistan has also committed to further strengthen taxation on real estate and on agricultural turnover or income by provinces, ensuring equivalent taxation of all sources of income and eliminating distortionary withholding taxes.
Moreover, it added, the FBR would also align the value of immovable properties with market rates and specify conditions under which long-term leasehold would be considered as the purchase of the property.
Pakistan, IMF Finalize US$6 Billion Package
Pakistan and IMF had struck a deal on a bailout package for about US$6 billion over the next three years to meet foreign debt obligations. The IMF and Pakistan reached a staff-level agreement on economic policies for a three-year Extended Fund Facility (EFF) on May 12.
The agreement, which needed approval from the IMF’s management, had come after months of negotiations arising out of economic crisis with short supplies of foreign currency reserves and stagnating growth.
It was earlier reported that the government was expected to transmit the final version of the budget with the IMF before the IMF’s board meeting scheduled to be held on July 3.
In brief, as per the Pakistan-IMF accord, Pakistan will receive $6 billion over three years and Pakistan will also receive US$2-3bn from the World Bank and the Asian Development Bank (ADB). Adviser to Prime Minister on Finance, Revenue and Economic Affairs Dr Abdul Hafeez Shaikh had hinted at raising prices in some areas “to recover costs”.
Shaikh had said that foreign loans had exceeded $90bn and exports have registered negative growth over the past five years.
Approved Budget Shared with IMF
Surprising as it may seem, it was earlier reported that the government was expected to transmit the final version of the budget with the IMF before the IMF’s board meeting scheduled to be held on July 3.
Read more: IMF finally approves $6 bn loan for Pakistan
The media reports had added that the approved budget and Finance Bill 2019-20 along with a report on compliance with all prior actions were key elements in the July 3 meeting of the IMF board – when it approved the loan for Pakistan.