Pakistan is currently suffering from the worst economic crisis. The double-digit inflation has reduced the purchasing power of people while the government also seems to be struggling with revenue generation. Amidst the existing financial crunch, the International Monetary Fund (IMF) has asked Pakistan to foist nearly Rs. 600 billion additional taxes while urging Islamabad to set up a task force to deal with corruption.
Though currently Pakistan’s economy is generating healthy revenue, the demand for more taxes has arisen due to an anticipated tax-to-GDP ratio shortfall.
However, the Pakistani authorities are yet to accept the demand of additional taxes by the IMF.
Afaque Qureshi, spokesman and a member of Inland Revenue Policy says, “The FBR is not considering any proposal to impose more taxes.”
Considering the current political situation in the country, it is highly unlikely that the coalition government of Pakistan Democratic Movement will accept this new demand. The ruling party, Pakistan Muslim League – Nawaz (PML -N), has lost the support of many voters in the wake of increasing cost of living ever since it has taken the charge of the office and it seems like that PML – N is not ready to take any more risks.
Sources have revealed that the IMF wanted Pakistan to impose a sales tax on petroleum prices, however, the Finance Minister Ishaq Dar has rejected the proposal.
Pakistani rupee is losing its value and the recent floods have further sabotaged the economy. Currently, the inflation in the country is around 23% and the GDP growth stands at 2%.
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