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Business

Web Desk
February 12, 2020

Pakistan not to raise tax rate or reduce collection target, says IMF as talks end

Business

Web Desk
Wed, Feb 12, 2020
IMF logo in Washington, US, April 21, 2017. Yuri Gripas/Files

ISLAMABAD: Pakistan was not to raise the tax rate until June 2020 or reduce its tax collection target, said the International Monetary Fund (IMF) as talks between the two parties concluded here on Wednesday.

Sources informed The News that Pakistan and the IMF agreed that there would be no mini-budget or a reduction in the tax collection target. The meeting was chaired by Prime Minister Imran Khan's Adviser on Finance and Revenue Dr Abdul Hafeez Shaikh and IMF Mission Chief for Pakistan Ernesto Ramirez-Rigo.

However, it was advised that Pakistan bump up its non-tax income by Rs400 billion to boost revenue collection. The country would also ensure implementation of the privatisation road map and not jack up the sales tax to 18 percent; the rate would, for now, be maintained at 17 percent.

Sources in Finance Ministry informed The News that Pakistan, for the most part, had achieved most of the goals the IMF had set for it. The global financial body was also satisfied over the country's monetary and current account deficits, they added.

The sources mentioned that Pakistan would make adequate efforts to achieve the tax collection target and that a road map to bring down the deficit and losses had been readied.

Both parties — IMF and Pakistan — would issue separate notifications pertaining to the 10-day talks, the sources added.