Quick execution of Rs170bn tax initiative: IMF not only satisfied, but ‘surprised too’: MoS

ISLAMABAD: The International Monetary Fund (IMF) is not only satisfied with the government’s measures to generate additional revenue of Rs170 billion through the supplementary finance bill but is also surprised over the speedy implementation of the agreed measures.

This was claimed by Aisha Ghaus Pasha, Minister of State for Finance and Revenue while talking to media persons here on Thursday at the Parliament House.

“These revenue measures were discussed and agreed with the IMF have been put in place. This matter was already agreed with the Fund that the government is bringing such revenue measures,” said the minister, adding that IMF is surprised with the government’s pace of work. “We worked very fast on the implementation of prior actions and commitments to the IMF programme”, she added.

Dar presents Rs170bn tax measures

She further disclosed that the IMF is also engaged with Pakistan’s friendly countries including Saudi Arabia, the UAE, and China with respect to the external financing needs of the country and would apprise the Executive Board.

Replying to a question, the Minister of State said that external financing was discussed with the Fund. “Our talks with friendly countries on external financing are ongoing and progressed and were optimistic that things move forward.”

The minister said that virtual talks are expected to be held with IMF late Thursday night and would discuss the points of the Memorandum of Economic and Financial Policies (MEFP). The government has also submitted further clarification to the draft of the MEFP, said the minister, adding the finalisation of the MEFP would not take longer time.

The policy level agreement was reached with the IMF mission before they left the country, however, on some wording/language, the government sought details while on some government provided, she added.

The minister, earlier briefing the Senate Standing Committee on Finance, informed that the culture of giving subsidies in Pakistan is very old and needs to end. The IMF on the negotiation table conveyed to the government, “mulk chalao ya power sector”.

Senator Mohsin Aziz suggested that a ban should be imposed on the luxury items being imported from abroad rather than increasing taxes on them, also this tax will only encourage the smuggling of these items.

Pasha further said that the government was first considering to totally ban imports of luxury items, however, the WTO, the IMF, and other international agencies were against it. Agriculture income tax is a provincial matter but the sector needs to contribute to the economy, she added.

She further said that as part of austerity measures, a scheme is under consideration to enforce electric vehicles’ manufacturing and deliberating on the financing mode to bridge the gap.

Copyright Business Recorder, 2023