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IMF sets conditions to target Pakistan state institutions

Govt told to shut commercial accounts of public sector entities

SAMAA | - Posted: Oct 24, 2021 | Last Updated: 1 month ago
SAMAA |
Posted: Oct 24, 2021 | Last Updated: 1 month ago

Photo: IMF

Talks for restoring the IMF’s $6 billion debt program and the release of the next tranche of $1 billion have been suspended again amid reports that the Fund has set stiff conditions targeting Pakistan’s state institutions.

The International Monetary Fund or IMF has also urged Pakistan to impose new taxes and end exemptions.

The talks will continue during the next week, though Shaukat Tarin would not return to Washington.

The IMF presented a stiffer set of conditions which included the demand for the government to shut down accounts operated by various public sector entities in commercial banks.

According to documents obtained by SAMAA TV, the government has also been told to operate a single Treasury Account with the State Bank of Pakistan (SBP) and bring more transparency to transactions for buying coronavirus vaccines, medicines and for distributing relief funds.

Pakistan has already acceded to some of IMF conditions, including raising electricity tariffs and hiking prices of petroleum products for the release of the next tranche of $1 billion.

Moreover, the government has also been asked to enforce 17% General Sales Tax or GST after bringing appropriate legislation in the parliament for imposing standard sales tax and ending all exemptions, tax holidays and incentives.

The IMF, it is learnt, pointed out that several government sector entities including NHA, OGDCL, the petroleum division and the defence ministry operate thousands of accounts in commercial banks, holding billions upon billions of rupees.

The international donor also urged the government to broaden the tax net by way of GST reforms.

In addition to urging the government to impose 17% standard sales tax, the IMF also called for improving the loan management system in the country, urging the government to set up a centralized debt management office.

A reduction in the income tax slabs, tax credit and curtailing allowances were also among the new IMF conditions.

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