IMF Raises Concerns Over Pakistan’s Tax Collection, Warns of Potential Mini-Budget

The International Monetary Fund (IMF) has expressed concerns over Pakistan’s tax collection efforts, suggesting the possibility of a mini-budget. According to private TV reports citing sources, the IMF has refrained from commenting on the speculation about government changes, stating that the IMF does not engage in political matters.

IMF officials emphasized that Pakistan must address its political challenges independently. The IMF sources indicated that it is uncertain if the current loan program will be the last, as it depends on its success. The government must meet all conditions set by the IMF.

The IMF highlighted that achieving agricultural tax targets requires cooperation between federal and provincial authorities. The implementation of agricultural tax laws is expected to depend on such collaboration, and the restructuring of tax systems necessitates joint efforts.

Furthermore, decisions regarding the privatization of Pakistan International Airlines (PIA) and electricity companies must be made under the new IMF program. The IMF advised the government against any actions that could impact budget targets and noted that determining the dollar’s value is a market-driven process.

The IMF acknowledged the government’s efforts to address inflation and enhance the efficiency of the tax machinery. However, every sector needs to contribute to improving tax collection. Timelines for releasing the installments of the new IMF package are being prepared, and economic challenges arising from agreements with Independent Power Producers (IPPs) were also noted.