‘Pakistan’s tax to GDP ratio low’

LAHORE: IMF’s resident representative Esther Perez Ruiz on Tuesday said Pakistan’s tax to gross domestic product (GDP) ratio was very low and the elimination of sales tax exemptions through the recent finance act would reduce complexity from the country’s taxation system.

Speaking at the Lahore Chamber of Commerce and Industry (LCCI), the International Monetary Fund (IMF) official said the purpose of the IMF programme was to promote macro-economic stability in the country, adding that the fiscal policy and monitory policy should promote the same vision.

“IMF programme is to bring a set of policies in Pakistan that can promote sustainable and inclusive policy growth,” she said.

She suggested that Pakistan should not only look to take measures related to tax, but also figure out other ways to enhance the competitiveness of the economy.

Talking to the occasion, the LCCI president Mian Nauman Kabir said the business community was sensitive about the impact of Pakistan’s ongoing 22nd IMF programme on the national economy and particularly on the private sector growth.

“Hopefully, we will witness successful completion of this program as well just like the 21st program,” he said, adding that it was also imperative to see if the developing countries benefit from access to IMF programmes or would the countries be better off if these programs did not exist. However, it has been observed repeatedly that IMF programs often result in interest rate hikes, devaluation of the local currency, and consequently high inflation.