Pakistan should abolish all kinds of subsidies, says the IMF
The International Monetary Fund (IMF) has asked Pakistan to increase electricity tariffs by Rs1.4 per unit to curb the surge in circular debt, SAMAA TV has learnt.
The IMF has asked Pakistan to take more steps to increase income tax, sales tax, and regulatory duties collection and urged the Federal Board of Revenue (FBR) to take steps in this context to pull up the annual tax collection target from Rs5.8 trillion to Rs6.3 trillion, according to officials who did not wish to be named.
In addition, the IMF has also told the government to abolish or significantly reduce all kinds of subsidies, according to the officials.
It has also demanded that the privatization program be expedited and that a time frame be set for the auction of loss-making state-owned companies.
According to the data released by the FBR, the net revenue collection in September stood at Rs535 billion, which is 31.2% higher than the net revenue of Rs408 billion collected in September last year.
The FBR has achieved net revenue of Rs1395 billion in the first quarter of the current financial year, which is Rs186 billion more than the target set for the period.
Last month, the State Bank of Pakistan raised policy rate from 7% to 7.25% after a 15-month gap and Finance Minister Shaukat Tareen said that the policy rate had increased due to the IMF program.
In August, Pakistan received $2.75 billion from the IMF under Special Drawing Rights (SDR) to cope with the crisis of the COVID-19, with the transfer of $2.75 billion, the country’s foreign exchange reserves jumped to $27.4 billion.
In 2019, the IMF executive board approved a three-year $6 billion loan to support Pakistan’s economic plan, which aims to return sustainable growth to the country’s economy and improve the standards of living.