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Tarin hints at more taxes to meet IMF targets

Azahar says government under pressure for extending 'too much relief'

SAMAA | - Posted: Oct 27, 2021 | Last Updated: 1 month ago
SAMAA |
Posted: Oct 27, 2021 | Last Updated: 1 month ago

Shaukat Tarin and Hammad Azhar address a news conference in Islamabad. PID

Shaukat Tareen, the advisor to the prime minister on finance, has hinted at imposing more taxes to meet the revenue targets set by the International Monetary Fund (IMF) for Pakistan as reports say the talks with the Fund have stalled.

Energy Minister Hammad Azhar has also said that the government was under pressure for extending “too much relief” to people.

Tarin and Azhar addressed a news conference in Islamabad on Wednesday shortly after Saudi Arabia announced a $4.2b package for Pakistan.

The Saudi support will likely help Pakistan conclude its talks with the IMF.

Tarin said Pakistan-IMF talks had almost concluded “baring one or two things” that would be settled in the next two or three days.

He said there was no uncertainty over talks with the IMF and that he had almost concluded the agreement with the Fund before leaving Washington last week.

The finance minister said an agreement with the IMF would augur well for the markets in Pakistan.

However, the advisor also indicated that the IMF raised questions about Pakistan’s revenue targets.

The federal budget set a revenue target of Rs600 billion from the petroleum development levy, but the government has not been able to collect anything on this head, Tarin said.

“So, the IMF asked how would you bridge the gap. We told them that the tax revenue for the first quarter was Rs175 billion above the target,” Tarin said.

He said that the IMF also called for balancing the basic deficit and making tax adjustments.

“We will have to make appropriate changes in taxes,” Tarin said.

Energy Minister Hamad Azhar said that global prices of food items and oil had tripled while oil prices in Pakistan were still lower than the world and the price of gas in Pakistan had not increased since 2019.

Hamad Azhar said a bag of urea is selling at Rs1,800 in Pakistan and the government has given a tax exemption of Rs450 billion on oil.

This has put the government under pressure for extending too much relief, he said.

Speaking about the Financial Action Task Force (FATF) and its decision about Pakistan, the federal minister said Pakistan had met 26 out of 27 targets set by the FATF. In June, Pakistan received 7 more action items on money laundering and the country delivered on four of them immediately, the minister added.

Hamad Azhar said that everything including coal, oil and wheat has become more expensive in the world market. He said it is hoped that global prices will come down in the next six months.

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